“What’s the best financial decision that you’ve made for your company in the last six months?”
This is the question that was posed recently to 13 members of the Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most promising young entrepreneurs. Here are their tips for making great financial decisions for your startup.
1. Raised the roof
I gave my employees raises across the board. They earned it after we had a great year in 2012, and they are also intelligent and loyal employees. Why not share the success with them? — Shahzil (Shaz) Amin, Blue Track Media, LLC
2. Took our entire team to a trade show
We recently participated in our first trade show. We assumed that the total cost—$10,000 for a booth, flights and food—was sunk. Our goal was to learn how to be successful in future shows—we did not care if we made sales. Having everyone there assured that we were aligned for the future. We could have sent one person to report back, but the collaboration was invaluable. — Aaron Schwartz, Modify Watches
3. Upgraded our technology
We purchased new PCs and iPads for our managing members and sales staff. You don’t actually realize how slow your system is running until you upgrade. The results have been phenomenal; not only did the upgrade boost work efficiency across the board, but our company morale has never been higher. — Anthony Saladino,
4. Hired an experienced CTO
We finally had enough money to be able to make the commitment to hire a Chief Technology Officer to help us with our new website and internal processes and systems. The cost was worth every penny. It cut thousands of hours of inefficiency and has also allowed the management team to focus on growing the company and providing customers with better service. — Derek Capo, Next Step China
5. Fired my accountant
I used the same accountant for almost a decade and just figured that all accountants were unresponsive in aiding with a company’s financial planning. The irony is that I work closely with CPAs in my business as referral partners and should have known better, but I didn’t want to bother with the hassle of changing. I finally changed my mind and switched accountants. Now, I’m on a much better path! — Darrah Brustein, Finance Whiz Kids | Equitable Payments
6. Invested in new markets
We made the decision to make a large-scale investment in opening up in a new market in L.A. This decision was costly—we had to engage in business development in the area, build a team, and get an office. But now that we’re entrenched in the L.A. business community, our business has really taken off. This was a great move for us in terms of proving our ability to scale. — David Ehrenberg, Early Growth Financial Services
7. Wrote and marketed a book
Writing my first book, which was published by McGraw-Hill, was a major undertaking in terms of time and financial commitment in 2012. However, it has led to an amazing start to 2013 for brand-building and coaching/training lead generation. — Elizabeth Saunders, Real Life E®
8. Fired a client
It can seem like a strange decision. However, if a client isn’t working out, it’s better to end the relationship—even if it means giving up some money. Many bad business relationships wind up requiring extra time and cut into the bottom line. — Thursday Bram, Hyper Modern Consulting
9. Invested in “acquihires”
We just finalized our second acquisition where the founding team of the company came with the business operation. This type of business acquisition has been called an “acquihire.” If you have the capital to do so and find an opportunity to expand your market share vertically or horizontally, I strongly recommend making such an investment. Each move will ultimately make us more profitable in 2013. — Logan Lenz, Endagon
10. Found suitable acquisitions
We saw relationship marketing as a natural complement to our flagship online marketing technology, and we considered either building this technology or buying it from an established vendor. Either approach would have required a large financial investment. By acquiring a suitable company, it saved a lot of time and put us on the fast track. — Ben Rubenstein, Yodle
11. Started a Retirement Plan
At the end of 2012, my co-founder and I worked with our accountant to set up 4019k0 and profit-sharing plans for our business. It was a great way to shelter some of our revenue from taxes and also create a meaningful benefit program for ourselves and our employees—a big win all around! — Brittany Hodak, ‘ZinePak
12. Invested in Talent
Everyone knows that you should hire slow. However, if the right person comes along who you want to build your team around, you should do everything in your power to hire immediately. If you are truly building a business for the long term and trying to grow your enterprise value, you should make the sacrifices, cut your salary, and do whatever it takes to bring this person on. — Matt Wilson, Under30Media
13. Performed a Cost-Benefit Analysis
The best decision I made in the last six months was the decision to start examining my costs. Performing a large-scale cost-benefit analysis of different advertising, services, and even employees helped me maximize profits. For a time, I was very focused on sales, but it’s profits that matter more. Your business is only as good as the revenue you accrue after the bills are paid. — Brian Moran, Get 10,000 Fans
Note: In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons. Learn more here.