You Gotta Spend Money to Make Money: The Impact of Investing in Business Technology
Guest blog by StreetShares
Just like accounting and legal services, technology has become an essential component of all businesses today. But just like those services, the cost can leave small business owners with sticker shock. Adopting tech can also present your business with the added challenge of keeping up and staying current as technology changes, improves, and becomes obsolete. You might be ready to break out your ledger books and adding machine and go at it the old-fashioned way, but as a business owner, you first need to understand the benefits associated with adopting new technology. Here are just a few!
Improvement of Business Efficiency
Time is money, especially as a small business owner, and any tech that gives you time back in your day to develop your business is worth its weight in gold. With the right technology, a business can greatly enhance the number of customers it can serve per day while still maintaining high customer satisfaction, and offer things like 24/7 customer support. Investing in efficiency allows you to:
- Utilize your available resources optimally, saving time and money
- Minimize production costs and therefore increase your profit margins
- Improve employee productivity
- Enhance the customer experience (and in turn, loyalty and word-of-mouth promotion) through more efficient services
Automation of Operations
Automation of processes involves dedicating machines to perform specific actions previously handled by the business’s employees, like inventory management and bookkeeping. Additionally, in the retail industry, investing in automation can allow customers to order goods and pay for them through an online platform without interacting with your staff. This frees up time for your employees to do tasks that can directly impact business development and growth. Work that used to take hours for an employee to complete now just requires a few minutes for technology to execute. Moreover, automation improves accuracy as the chances of errors are virtually eliminated by taking humans out of the equation. Unlike manually-handled operations, automation allows for predictability and consistency of production and results. Consequently, problems associated with the unpredictable and error-prone nature of us human beings (some beings more so than others, but all of us nonetheless!) are dramatically decreased.
Accountability
With great power comes great accountability! Effective use of technology can ensure that employees are accountable to your business. With an excellent database and record management system, transaction records can be stored with complete accuracy and history of all activity and changes. As a result, all members of your business are compelled to operate in a transparent and honest manner as technology can track any errors or fraudulent activities.
By using technology to track work and set daily productivity goals, you can gain insight into which teams and team members are performing best and which might need a little coaching. You can also use technology to monitor sales and identify the progress of your products in the market. Compounded with your team and productivity insights, you’ll then have a clear path to take the necessary measures to improve affected areas of sales.
Costs Versus Impacts
The benefits are obvious, but at this point you’re probably bracing yourself for the price tag. Adopting new business technology is likely not going to be what any small business owner would consider “cheap,” and the money doesn’t end after the initial purchase – the reality is that your business will incur costs from the time implementation kicks off, throughout the training and adoption process, and even after it’s been fully implemented. These could include:
- Initial costs of buying the software or hardware and facilitating training
- On-going charges such as maintenance costs, including system hosting fees
- Costs of continually upgrading the technology. Emerging innovations generally offer better solutions than past technology, and most tech will eventually become obsolete and incompatible with the modern marketplace (at which point its continued use could even harm your business)
Therefore, embracing a new technology is not a decision to be taken lightly – take your time, do your research, ask for demos and references from vendors, and create a business case for your employees and stakeholders. Take note of any questions or concerns from not only management and executives, but the employees who will be using the software or hardware every day. This is likely not a decision you’ll have the time or resources to do over, so make sure you get it right on the first try!
Ask Yourself
In this “never log out” era of always-connected social media, smart fridges, and everything else that comes with living in the internet age, investing in technology is unquestionably a significant step in growing and shaping your small business. Many opportunities come with embracing technology, and with the proper research and preparation, it can be an investment that pays dividends every day you’re in business.
The important factor to remember is that every business is different- as such, you need to evaluate your unique needs and ask yourself a few key questions. You’ve seen an exciting new technology, but is it even compatible with your business and industry? If so, what’s the cost of implementing and maintaining it, and will that spend leave your business in a financially healthy state? Finally, what are the possible impacts, roadblocks, and return on investment as a result of adopting this technology? Once you’re able to answer all of these questions, you’ll be ready to invest in technology and move your business forward into the future! Want to invest in your business, but need funding? It’s time to look at what types of financing are available. We take a deeper dive into financing for small business in this ebook, “The Basics of Small Business Financing.” Learn more specifics about how to get a small business loan, how to open a business line of credit or get government contract financing.
