The Bottom Line: Essential And Non-Essential Startup Expenses

Investors talk about how angels should look at whether a company is good, and what makes a bad investment. They say that poor investments involve putting money into problems, or someone who is constantly overwhelmed and in danger of giving up. This happens often because founders take on too much.

Some things are worth paying for, others, not so much. A good phone system and IT infrastructure is a must in any modern company, digital or not. Expensive office space, on the other hand, might carry prestige at the cost of your bottom line. In this breakdown, we’ll look at three areas where founders can benefit from putting money into something, and three examples of where money might be better spent elsewhere.


Security these days is more than just making you feel protected. If you’re doing business online, you need to know your servers are protected, your IP is protected, and your customers are protected. Good security uses FOB security to manage tailgating and limits access points. Infrared sensors may track employee movement and behavior to make sure there’s nothing out of the ordinary.

Security is very comprehensive, as digital theft always occurs at the weakest point of entry.


Don’t delude yourself into thinking you can manage your advertising by yourself. Figure out what you can manage, and look at outsourcing the remainder. Find someone you trust, either through running test campaigns with freelancers you interview or by asking colleagues, and launch a campaign. Make sure you monitor the campaign and work closely with your advisor to maximize every dollar you’re spending.

Legal And Tax Help

If you’re going into business, you need to structure your corporation and make some important financial decisions that will affect your taxes each quarter. Simple, cost-effective legal and tax services exist for this purpose. Just don’t expect this kind of affordable protection to be of use in a major lawsuit.

Be prepared to invest in an attorney to defend you if there is a major dispute.

Avoid Subscriptions

Costly subscriptions sound like a great idea, usually because they come with a suite of very useful tools. Always ask yourself if you can manage without a tool, and determine whether it is essential to your business. Some subscriptions will pay dividends if you make the right choices.

Avoid The Fancy Office

There’s a myth that one needs a fancy office to look the part. In fact, you might accomplish more by taking your clients out to lunch and working out of your home. Paying for the client’s meal and treating them nicely shows a personal touch, and it allows you to arrange a meeting in fancy locations.

Avoid Outreach You Can’t Quantify

Founders run into trouble paying a lot to attend networking events, or for certain press opportunities, with little to show for the effort. A good article about you could generate excitement, but that may not translate into sales. Paying to advertise and waiting for interest to build around your brand is a long term strategy, but the payoff might be worth the wait.

Determine Your Needs

Every business is different, and there are exceptions to all of these rules. Thinking critically about your own abilities as a founder, and what you need for success, will help align your values with dollars spent.

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