Time is Money: Measuring your Return on Technology
Guest blog by StreetShares
It might be a bit cliché, but, when it comes to your business, time really is money. When determining your Return On Investment (ROI) and technology you need to make sure you are not spinning your wheels troubleshooting useless tech. Remember- technology should be there to help you conduct business, not deplete your time and financial resources!
Instead of wasting your valuable hours and money on aging and inefficient technology, you should consider swapping some of it out for newer, more comprehensive technical solutions. But what tech should you consider? What are some of the factors that play into a switch to new technology? How much would it cost- and would it actually end up saving you any money in the long run? We’ll help you answer those questions and break down some ways to optimize your time and resources when it comes to your business tech.
Basic ROI Mechanics Breakdown
ROI comes down to value for what you spend. The main question is if the service you are getting is exceeding, meeting or falling short of the money you’re putting into it. You don’t need to be an accountant to work out your ROI- a little bit of some basic math will do the job. Your ROI equals your net gains against your costs. For example, if you spend $150 on a newsletter production service, but make $175 from ad revenue from those newsletters, your ROI is $25.
While the math is relatively simple, you need to be careful when assigning numbers to your cost and benefits because your initial benefit numbers will be approximations. As a result, you could end up either exceeding or falling short of what you initially expected, so you have to be ready to adjust your numbers on the fly. You also need any employees or organizations you’re working with to understand how to come up with a reasonable cost projection. Once you know how to estimate your ROI, you can properly examine the cost-benefit ratio on future tech-based decisions.
See also: 9 Low-Cost Ways to Invest in Business Operations
Judging The Overall Impact
Proper technology implementation can add a lot to your business, increasing staff productivity and helping to make the most of your money. For instance, subscription services like G Suite or Slack are great ways to use technology to better communicate and share resources with your colleagues and employees. The key when considering either implementing or replacing all tech is the cost comparison and cost-benefit analysis. You should consider the cost of the tech itself, any companion products, implementation and update costs, as well as training time for any employees using that new technology.
While it might seem like a secondary worry, you should also consider how the new tech will impact your employees. It’s likely they will work most directly hands-on with that tech, so you need to make sure they’re comfortable with it. Technology that happens to boost company morale and save valuable staff hours is a major plus.
The same goes for the general customer experience and interaction with your company. For example, any chance to reduce load time or make customer interactions with your company website better should be seized upon if at all possible.
See also: You Gotta Spend Money to Make Money: The Impact of Investing in Business Technology
With the abundance of tech services available for business owners these days, you have no shortage of options. Don’t settle for technology that might not fit what you precisely need or that costs more than you’re comfortable spending. Instead, pocket that cash and save it for something more important to you and your overall business goals.
If your veteran-owned small business needs a money boost to invest in needed technology, it’s time to look at what types of financing are available. We take a deeper dive into the topic in this ebook, “The Basics of Small Business Financing.” Learn more about how to apply for a small business loan, how to open a business line of credit, or how to acquire government contract financing!
