In business, our successes are generally defined by our profits. While many of us start a business venture with more than just money as motivation, when it comes down to it, what we earn is the most important thing. And finding the balance between spending and earning is always a tricky one in business. You need to be investing in the best workforce, equipment and materials to create good products or services - while still turning enough of a profit to make things a success. Here are three, tricky decisions you might have to make as your venture grows.
Generic vs bespoke software?
Software is so important in business. These days, so many processes throughout our company will be done online, and so, the right software to run everything on is crucial for speed and efficiency. There are lots of great software on the market that can fit most businesses, but in many cases you will need to adapt your processes around their limitations. If you have more money to spend, investing in bespoke software allows you to tailor everything to your exact tasks and needs. This won’t come cheap, but at some point you might reach the stage where it’s the next logical step.
Outsource or in-house?
Deciding whether to outsource departments of your business, or to hire your own staff and run them in house can be a tricky one. It’s not ‘one size fits all’, and instead, will depend on your personal preferences, time limitations, budget and other factors. When you outsource, it’s a weight off your shoulders. You know the work is being done to the highest standard as it’s being tackled by a business who are professionals in their field. However, it does come at a cost, and if you’re looking for ways to maximise your profits long term then this is an area to assess. When it comes to setting up your own in-house departments, it’s often a lot of money, time and effort up front- but plain sailing once everything is up and running. You’ll need to find bigger premises to house your staff, and spend time recruiting and hiring the right people for each role. You’ll have to train candidates for each position, from PMP and CAPM training for project management to CPCS training for those in construction. Even if the candidates you take on already have experience in a similar role, you’ll need to make sure their training is up to date and that they know exactly what they’re doing in their new position.
Buy equipment or keep hiring?
As with outsourcing, there are plenty of benefits to hiring equipment too. You get access to a high-quality piece of machinery, tool or equipment right away without having to save. Not to mention any repairs and maintenance costs are covered by the hire company and not you (as long as you weren’t responsible for any damage). Hiring equipment also means there’s less risk for you, if your business venture does fail later down the line you can simply give what you’re hiring back. When you’ve purchased an item, you then have to sell it which will almost always be at a loss. But again, hiring equipment can cut into your profits and in some cases it’s worth investing yourself. It could be anything from printers to power tools to machines to vehicles, weigh up the pros and cons and decide if it’s best to keep hiring these things or put the money into buying your own.