Human Resources? Marketing? Which aspect of your business do you need to finance first?

For the new business owner, once you have figured out what kind of business to build and how to finance it, the next decision would be to determine which business investments should you prioritize financing first.

Different businesses will have different priorities in what to finance and invest first. You need to research the impact of the different business units in your company can have depending on your particular industry.

However, there are certainly some business investments that a company should prioritise first no matter the industry. Let’s delve into the top 6.

#1: Human Resources (HR)

“The greatest asset of a company is its people”, a quote by Jorge Paulo Lemann who is the co-founder of Banco Garantia. Investing and financing in human resources (HR) should come first in starting and financing your business. You can have a very good business idea, but if you do not have the people to help you achieve it, that idea will remain just that, an idea.

The first thing you need to do is to appoint a HR manager. To pick the right person for the right job, be certain his or her values and vision aligns with yours, and do empower the person to hire the best HR people available to build a small yet effective team. Communicate your requirements clearly and trust the team to do their job.

To support your HR team, you would need to invest in the best HR system/tools according to your budget and needs. At the minimum, a human resources system should contain the following things:

  1. Recruitment and Hiring: Contain the functions of posting jobs to multiple platforms, crafting a job description, and automatically accepting and rejecting applications based on criteria.
  2. Payroll and Compensation: Able to pay your employees on time and without difficulties.
  3. Benefits: Employees are able to access and claim their benefits.

#2: IT System and Equipment

As the world gets more and more digital, having a good IT system is crucial in enabling your business to operate efficiently. Working from home is becoming a norm since the pandemic, with customers and clients increasingly relying on the internet. Your employees need to organise their daily tasks, conduct business with clients, attend important meetings, and do other company-related matters all in the digital space.

Furthermore, you need a comprehensive set of hardware and equipment to support your IT system. Being able to work from anywhere and anytime is becoming the norm these days. Most employees are in fact looking for flexible working arrangements these days so your business needs to adapt to these changing working conditions. That said, you should preferably look to financing laptops for all your employees and adapt to the culture of hybrid working in the office and at home. Also important is to have sufficient infrastructure to support VPN capabilities for all your employees so that company data remains secure.

Other than that, you could choose to finance your own servers to store data or procure the services of cloud computing from providers such as Amazon and Microsoft. Investing in your own servers might be better if you want more control of your business, but getting your services from cloud computing providers enables you to access the latest functions and cut down on server maintenance costs.

#3: Physical Working Space

Physical working space is still important in this day and age, even if you decide to offer flexible working arrangements. Whether it’s owning or renting, a physical working space is important to foster healthy engagement among your employees.

If there is one thing that digitalisation cannot replace, it is the human connection. It is very different talking to someone face to face compared to doing so virtually. A physical working space that is safe and comfortable helps provide a conducive environment to foster healthy engagement between your employees.

As a leader, you would also want to employees to see you in action so they can better align their understanding of how they should behave. Working together in the same physical space allows for better observation along with both active and passive interaction for your employees to feel recognized and valued.

On a more practical note, you could explore the option of renting coworking spaces to accommodate hybrid working arrangements. Arrange for maybe 3 days working from a physical working space and 2 days working from home. The 3 days could be done in a coworking space where you do not need to commit to an office.

#4: Advertising and Marketing

Once you have got the right people and environment with the appropriate IT system, the next thing to finance is advertising and marketing. It will all be for naught if you have a very good business but people are not aware of it.

This is where human resources will be pivotal to your business. Hiring a good marketing head and subsequently, the team improves the visibility and branding of the company. Generating revenue and profits are easier for the sales team and reduce their burden in marketing.

You should focus more on digital advertising and marketing as customers are increasing their time on online platforms such as Instagram, Facebook, search engines, e-commerce, YouTube, and podcast. Traditional marketing such as billboards, print media, window displays, and broadcasting still works but is generally considered more expensive.

Don’t forget also to hire copywriters to create engaging content for your business. Leave it to the professionals to create the best impact where you need it.

#5: Education and Training

As mentioned before, your employees are your most valuable assets. It is not enough to just hire them for their existing skillsets and experience. To meet their personal development needs, career development needs, and to increase the quality of work you receive, do look into developing them in alignment to your business needs.

Craft a training budget and choose the right training materials that suit your vision of where you want to herd your employees towards. You could start by exploring free courses that are available through Khan Academy or EdX where you can get free access to the videos of the courses. From there, you can see whether your employees want to get a formal certification. After that, explore other free and paid courses such as Udemy, Skillshare, Coursera, and Linkedin.

It is also good to engage your employees in conversations about their own vision for their career growth. Let them know that you will be open to listening to their requests for education and learning if it aligns with business needs and the budget can accommodate the request. Encourage them to do their own exploration rather than expecting you to think of it for them.

You may later want to offer subsidizing tuition fees for employees who are personally driven to take up professional courses or postgraduate studies that align with business needs.

#6: Administration

Do not take this lightly. Having a good administration team and system is the fine line between a great and a good business. Its role is to make life easier for everyone from management to employees by creating operational efficiency.

A good administration team ensures that the working schedule of management and employees is well managed, filling and database (whether physically or electronically) are well organised, and employees can focus on their core area of work without worrying about other things.

Furthermore, the administration team is normally the first face that customers will see when they come to your office, and they represent an integral part of the image of your company. An excellent administration team can elevate your company to be more productive, efficient and, organised.

Conclusion

Getting into the nitty-gritty of financing a business could be confusing at first. Start by financing the mentioned business investments first and do do your homework to learn what others you should prioritize to closely follow behind them so your business can have a smooth short-term, mid-term, and long-term investments schedule that works.

 

Let us know in the comments below what you are financing first in your business!

 

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