3 Things Your Small Business Should Never Be Afraid to Spend Money On

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Your small business needs to spend money to protect its future. Learn why you shouldn’t cut corners by skipping these important items. 

When you’re running a small business, you need to be smart about your expenditures. You want to grow your business bank account balance while making smart investments in your company’s future, so you don’t want to spend on anything unnecessary.

However, there are three big things that your company should not be afraid to pay for — and should make sure to pay enough to get the best, even if that costs a little extra. Here’s what they are.

1. Insurance

Insurance provides vital protection against potentially devastating financial losses. Every business should have liability insurance in case it is sued. Companies should also have:

Business interruption insurance so they can stay afloat in case something causes them to temporarily be unable to perform their work.Property and equipment insurance if they own any expensive property.Workers’ compensation insurance, which may be required by state law for companies with employees.

Companies may need additional protections as well, such as commercial auto insurance. Always make sure to buy enough coverage — including the right types and the right maximum policy limits — and to get it from a trusted insurer who will be there to pay a claim promptly if something goes wrong.

Spending money on insurance can be crucial to make sure the company can stay afloat and not have to empty its bank account for problems.

2. Professional help for accounting or legal issues

Companies can face a host of legal and accounting issues that must be addressed. For example, you may need advice on how to structure a business, or on how to respond to a lawsuit if a disgruntled customer sues. Companies also may have complex tax rules to comply with, including tax rules related to sales tax and employee taxes.

You don’t want to make a mistake and end up facing legal problems or having the IRS come after you because you didn’t follow the tax rules. So, be sure to pay what you need to get high-quality professional advice.

3. Compliance costs

There are a whole host of regulatory rules that apply to different kinds of businesses. For example, you need to follow workplace safety rules and labor laws. You may also need to follow industry-specific rules, such as HIPAA privacy guidelines if you’re in the healthcare industry.

Fines for not following all regulatory requirements can be huge. For example, if you violate HIPAA regulations due to willful neglect and you don’t correct the issue in a timely manner, you could face a $50,000 fine.

It’s not worth being penalized by the government for not complying with the rules applicable to your business. If you are required to do certain things — such as providing workers with personal protective equipment or maintaining a secure environment for medical records — you should spend the money necessary to comply with the rules.

Ultimately, you never want to jeopardize the long-term success of your company to save a few bucks in the short term. Think big picture — and consider downside risks — whenever you decide if a particular expense is worth incurring.

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