Being an entrepreneur is not easy by any stretch of the imagination. You have to make thousands of important decisions every single day. What you decide could determine the future of your business. If you make the wrong decision, there can be serious consequences. As statistics point out, 96 percent of companies go under during their first decade.
One decision you will probably have to make many times as a business owner is whether or not to invest in new technology. New technology can either be a drain on finances or a revenue generator for your company depending on the circumstances. With that in mind, below are a few tips for implementing new tech into a small business.
Perform a Technology Audit
First, before you decide to invest in new tech, you should get a clear overview of what you already have. Go over your current systems somewhat thoroughly. Make sure to create a record of the tech you already have.
However, go beyond that. Include the benefits and drawbacks of each piece of technology that could be feasibly upgraded. This will be good info to have when making the decision of whether or not to upgrade. SMB Group found that 64 percent of companies with 20 to 49 employees spend over $250,000 annually on technology.
Not every new kind of technology is going to stand the test of time. Just think, for example, about HD-DVD. Those that invested a lot of money into HD-DVD probably lost their shirts since HD-DVD has been completely supplanted by Blu-ray and digital streaming services like Netflix to the point HD-DVDs haven’t been heard of for several years.
Similarly, you need to be cautious about the investments you make. You, for one, need to be able to separate lasting trends from fads. Fads don’t last, but lasting trends could become permanent. This is probably the case with mobile. The trends have been clear for several years now to the point mobile is obviously now a permanent part of American life. Figures published by Smart Insights indicate that mobile internet use surpassed desktop internet use a few years ago. As such, investing in mobile by creating an app is probably a far safer investment than some other new tech that seems more gimmicky and doesn’t have as much support from consumers.
Do a Cost Benefit Analysis
Additionally, you must cost it out. This should not only be the case for investments into technology. It should be the case for every single sound business decision. If the upside of spending money on something is not increased revenue in the near or long term, you are making a strategic mistake by allocating those funds in that way.
Try to do as accurate of a cost benefit analysis as you can as a small business owner. The new tech should help you increase sales or obtain more clients in a way that seems achievable. Those added profits most outweigh the expense of the investment. If not, it must be for something that either lowers overhead costs significantly or is integral to your business’s operation such as new computers.
Look for Customized Solutions
Not all technology may fit your business. However, certain kinds of tech can be customized so it does meet your specific business needs. This is the case, for example, with Apache Kafka that can be used to stream data directly to software or an app. Putting Apache Kafka to use in your company by creating software that records data regarding your industrial processes can be used as part of a big data strategy to improve your factory’s efficiency and productivity.
Overall, although technology can be expensive, you shouldn’t ignore it completely as a small business owner. Instead, determine when it’s the right choice to invest in new tech due to market trends as well as a cost benefit analysis. That way you can insure your investments into technology help to raise profits instead of waste resources.
by: Kevin Faber