Spend Smart on New Technology for Your Business

Seventy-five percent of small business owners who are optimistic about business growth in 2017 attributed their optimism to technology¹.

That’s good to know but the “what” and the “when” are key questions that need to be answered to ensure a smart investment in technology for your small business. Afterall, cash flow is tight and business financing must be used wisely. Sharp gut intuition is a key trait of successful business owners, but so is discernment. How do you balance the two? We’ve put together a quick way for you to assess any technology investment for your business.  

Quick Technology Investment Assessment

How it works: Answer key questions related to the four categories below. Groups of questions within the categories have points assigned to them. Make sure to give each category only one score.

  • Urgency
  • Competitive Landscape
  • Cost
  • Risk of Not Implementing the Technology

If you feel like it, feel free to leave the scoring out altogether. It’s not absolutely necessary. The questions are designed to help you assess your particular situation and will enhance your decision making whether you assign points to your answers or not. So let’s begin…

Urgency: Importance of Implementing the New Technology Now

  • Is this technology a major improvement on something you already have and will it directly impact ROI and/or greatly improve business operations?  
  • Do you have problems with current technology that are negatively impacting revenue and/or overall operations that this technology will fix? 

If your answer is yes, to either or both of the above questions, assign 3 points. 

 

  • Are you not sure of the ROI or how long it will take to recoup your investment?
  • Will it resolve identified problems with production, staffing, quality assurance or customer service? 
  • Have employees or consultants recommended this technology?

If yes, to any or all questions, assign 2 points.

 

  • Is your current system is obsolete but working fine for now? 

If yes, assign 1 point. 

Competitive Landscape: What’s the Industry Trend?

Small businesses can get the edge on larger businesses by adopting technology earlier. It’s easier to roll out new technology to a one or a few small teams.  In contrast, large companies take up to a  year to launch new technology to a multitude of teams spanning different regions, and the expense is monumental. Use your size to be fast and agile. Your small business competitors may not realize the small-business advantage of speed to market

 

  • Are most competitors already using it and ROI is essentially guaranteed?
  • Does your gut tell you the investment is necessary to keep you competitive?

If yes, to either or both, assign 4 points.

 

  • Is this technology new but at least one of your main competitors has already jumped on it?

If yes, assign 2 points

  • Is this new technology not yet adopted in your industry but your business success and model requires you to be first to market or do you want to be a leader for the first time?
  • Can you get a great price from vendors because of the lower demand?

If yes, to either or both, assign 2  points.

 

  • Are other non-competitor businesses or customers in your vertical market using it? Tip: This can present an inside view. Ask non-competitors about their experience with implementation and use. Ask for references on technology vendors and leverage your connection for better pricing. 

If yes, assign 1  point

 

Cost: Investment vs ROI

How will you afford it? Keep in mind that small businesses are always tight for cash. Don’t lety that stop you from succeeding. Business financing and small business loans are available. 

 

  • Do most, or all of your competitors have it? 

If yes, assign 4 points

 

  • Is ROI proven and you have calculated that you will recoup your investment within months, a year, or other time frame that fits your business financial goals?

If yes, assign 3 points

 

  • Is the expense manageable with some cutbacks such as tabling other not-so-urgent plans?

 If yes, assign 2 points

 

  • Will the technology improve business operations and customer service?
  • Will the ROI not be noticed immediately but you see the logic in the investment?

 If yes, assign 2 points

 

Risk: What’s the Cost of Not Investing in New Technology?

Is the technology related to a business issue that if not improved, updated or fixed, will put your business at risk?  For example, if the investment is related to cyber security, postponing could be too risky. In the long run or even short-term, your exposure could cost more than the cost of implementation.

Consider the facts:  Small businesses continue to be major targets of cybercrime. A 2016 report by Keeper Security and Ponemo Institute² stated that 50% of small and medium sized businesses in the US were victims of security breaches in the last 12 months. Stephen Cobb³, a senior security researcher at antivirus software company ESET, said small businesses fall within the “sweet spot” for cyber criminals because they have more digital assets that individual consumers and less security than large companies.

The goal of cyberattacks on businesses is usually to commit identity theft. Businesses that conduct credit card transactions are at risk. Additionally, industries that may not handle extensive credit card transactions but store sensitive personal information include healthcare, finance, security, legal and insurance. Not protecting your information exposes your business to lawsuits, loss of customers and damage to your business reputation.  

 

  • You’re NOT up to date on security and your business handles sensitive information such as credit card transactions or personal information such as address, social security number or work history. 

If yes, assign 4 points.

 

  • You don’t have security measures in place such as encryption of your business financial records, customer records and employee personal information.
  • You don’t process credit cards or store sensitive customer information.
  • The main information at risk is your businesses and you have few employees.

If yes, to any or all, assign 3 points

 

  • You have security measures but they are only “token” measures, and you have not considered the reality of a threat.
  • The technology investment will address issues with real measures.

If yes to either or both, assign 2 points.

 

  • You have security in place but you company is growing and your current system needs to be re-evaluated and/or improved.
  • You are increasing staff and have not trained new employees on password security and/or the handling of sensitive data about your customers and your business.

 If yes to either or both, assign 2 points.

 

Calculating your score. Add the points up.

12 – 14 points = High Score. What are you waiting for? Secure business financing now to make this happen. Find a technology vendor and make an implementation plan for roll out with employees. 

9 – 11 points = Middle Score.  Get ready to invest in technology in the next few months. Speed is the new currency. You may not think your competitors on moving on this, but if you know about it, then they do. Get better pricing than your competitors and have a better implementation plan in place. 

8 and below = Low Score. Do more research if you feel more comfortable. Maybe the technology is just an interim fix and an entirely new technology platform is on its way. Avoid buyer’s remorse but don’t get left behind. Research helps us make better decisions but business success relies heavily on intuition. In the end, you have to trust your gut. 

Good luck!

Coming up on future blogs. We’ll dissect the ins and outs of must-have technology like CRM, trends such as chat bots, and how to determine when it’s time to hire an in-house IT administrator.  

¹ Source: www.newyorklife.com/newsroom/2017/small-business-owners-highly-optimistic/
² Source: www.signup.keepersecurity.com/state-of-smb-cybersecurity-report/
³ Source: www.businessnewsdaily.com/8231-small-business-cybersecurity-guide.html#target