When you’re trying to make your business more profitable, you have to budget your expenses carefully. The way that you allocate your resources is going to have a significant impact on your ability to achieve sustainable growth. Spending too much on basic overhead costs can easily put your new enterprise in the position of being unable to afford key expenses geared toward facilitating growth, optimizing efficiency, and safeguarding your operations. Here are some key budgetary line items that you may need to start spending more on.

Insurance

It is important for small business owners to recognize the practical utility of structuring insurance to include endorsements beyond general liability coverage. Having comprehensive protection provides you with a means to withstand major losses or liability.

A lawsuit can be a devastating operational and financial obstacle for a small company with limited resources. Legal costs alone could easily swallow up an entire quarter’s net revenue. A money judgment could result in liens or encumbrances on assets. Resultantly, property or equipment could become unusable as collateral for loan and financing opportunities.

To avoid this type of scenario, you evaluate their greatest risk exposures and tailor their package policies to include one or more key endorsements to handle claims that fall outside of general liability coverage. Including other vital protections such as directors and officers, insurance or professional liability coverage may prove to be a wise investment.

Legal Fees

Having good legal counsel may prove to be invaluable for a small business. It is crucial that a business’ governing documents and agreements with third parties adequately meet its needs and safeguard stakeholders’ legal rights and remedies. Getting professional assistance with organizational management can equip you to protect your legal interests and ensure that all of your business activities are consistent with applicable law.

Technology

Getting the right technological tools to drive your day-to-day operations could allow you to operate your small business more efficiently. While investing in software to streamline your workflow or optimize data analytics could represent a sizable expenditure, the benefits of these types of programs could make your investment well worth it.

To make some of your company’s operating costs affordable, you should shop competitively. Reach out to vendors and service providers about possible avenues for savings. Customizing various features or coverages could help you fit some of these important expenses into your operating budget without taking too much away from other necessary line items.