Technology never stops improving, with the result that no matter how hard you try, there will always be another upgrade out there to help your company run more effectively. If your budget is limited, how do you decide when is the right time to invest in new tech?
When an Investment Makes Sense
Keep an eye out for these situations to indicate that your small business technology could use an update.
Your Business Is Expanding
As your business adds new employees, departments and services, your technology needs to keep up. Realizing you’re facing growing demand is an ideal time to see whether your current setup still makes sense.
For example, when you started out your business may have been able to operate on a consumer-grade router and internet service. But add people to the network and your connection will eventually slow down. Consider making upgrades like a more powerful router or a fast mesh network. Check whether your provider offers a faster service, such as fiber-optic internet.
It’s Been Several Years Since Your Last Upgrade
If you haven’t upgraded your computers and other technology in the past three years, it might be time to do so. This figure doesn’t apply to all your tech across the board, but the principle behind it does — not only is older tech less effective, but it could also pose a security risk.
Older devices may not have the latest defenses in place against cybercriminals, who succeed by developing new ways to steal data and financial information. Making improvements to your cybersecurity alone could make the upgrade worthwhile.
You’ve Changed Your Business Approach
If you’ve revamped your business model, then your current tools may no longer be up for the job. For example, say you’ve started hiring remote workers. In this situation, you need a different set of equipment than when everyone worked in one building. Your business now relies on necessities like fast internet connectivity, videoconferencing in your meeting rooms and messenger apps like Slack.
Employee Productivity Is Falling
Outdated technology can kill productivity. If each employee needs to spend 10 minutes waiting for their computer to boot up several times a day, that amounts to a huge sunk cost over the course of even a single year. If your staff has been less productive lately, then obsolete technology could be the culprit.
You’re Facing a New Challenge
Whenever you’re struggling with a new issue in your business, consider whether technology could help you over the hurdle. For example, after launching a new product, you may have more customer service issues, and your staff may not have time to keep up. You could try automating part of the system with an AI chatbox that answers the most common questions, leaving time for your employees to focus on other work. This is just one of the ways you can make AI work for your business.
Other Investment Considerations
Once you’ve decided to invest in some new tech, you’ll have to determine exactly what that investment should look like. Ask yourself:
How Much Should You Spend?
In a 2019 survey, the typical small-business owner reported spending between $10,000 and $49,000 per year on new technology. How does your business match up?
To stay on track with your competitors, consider committing a fixed share of your annual profits to business investments, such as investing at least 20% of all your earnings to improvements like upgraded tech or more hiring. That way, you keep putting money back into your business so it continues to grow.
Should You Repair Existing Tech or Buy Something Brand-New?
One common approach for deciding whether to repair or replace technology is comparing the cost of the repairs versus the cost of buying something new. If the repairs cost more than 60% of replacing the device outright, then it’s worth buying something new.
For example, a salesperson’s phone breaks down. It would cost $500 to buy a replacement, while the repairs would be $200. Since the repairs cost less than half the expense of a new phone, it would make sense to repair it.
How Can You Compare Different Options?
If you’re trying to figure out which tech upgrades would best serve your business, try scrolling through reviews on websites like Capterra or G2. These sites also show a side-by-side comparison listing the pros and cons of different possible business investments.
Once you’ve narrowed down your search, you can demo the ones that look like the best fit. Be sure to consult your IT specialist to see whether any potential upgrade would be compatible with your existing systems while also being easy enough for your staff to learn.
By following this road map, you can decide when the timing makes sense to invest in new small business technology and figure out the best options to improve workplace productivity.
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