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Tech Investment Strategies: Balancing Technology in Your Small Business

Something might seem captivating today because it’s shiny and new, but will there be any real spot for it in the company six months from now?


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The advent of readily accessible technology has opened up tremendous possibilities for small businesses, but learning how to balance the use of that tech properly can sometimes be problematic. 


The ever-increasing onslaught of new digital solutions is both a blessing and a curse. Tools that couldn’t have been imagined just five years ago are now available for business use from a variety of vendors, and even those that aren’t yet perfected for wide-scale application are generally presented in a beta version that can enable entrepreneurs to at least test the waters. But this embarrassment of riches contains the harsh reality of sometimes simply being too much within its vast promise.


Tech investment strategies carry with it the potential of completely transforming the methodology behind a business’s operations, but the seemingly endless array of options can end up causing some entrepreneurs to grind to a halt in the decision process due to the sheer volume of choices. The advent of YouTube and other social media outlets adds fuel to the fire; for now, many voices offer their perspectives and personal experiences about assorted tech elements. It can be difficult at best and nearly impossible at worst to decipher anything of value from digesting too much content.


And yet, it’s entirely impractical to expect you to somehow have the time to thoroughly investigate everything independently. Most businesses don’t have the luxury of casually investing in new technology, so there needs to be a lot of intentional research and meticulous study before embracing something at an operational level. Firsthand observations from colleagues and peers in other business settings can be much more beneficial than distilling a hundred opinions gleaned from total strangers on YouTube. 


Sometimes, particularly in scenarios involving a sole proprietor, the prospect of researching technology options might seem so daunting as to allow it to simply fall by the wayside. In the face of trying to meet the demands of conducting daily business, some entrepreneurs relegate the pursuit of technology to the “would be nice to have” category rather than considering it a critical component of growth and development. With the existing overhead necessary to merely turn a profit, investing in something that’s an untried entity might be incredibly off-putting. This hesitancy can be highly detrimental because your competition is likely investigating steps to streamline operations and accomplish more, and technology will likely be a significant component of that.


The flip side of this situation is the scenario in which an entrepreneur becomes so enamored with the latest tech that it becomes the unhealthy focus of the business at the expense of the revenue-generating items that truly matter. Obsessing about having the newest gadget simply for the sake of “keeping up with the Joneses” can quickly devolve into a financial sinkhole. Money that might be better spent in other facets of the organization now ends up being allotted toward whatever the flavor of the month happens to be, with no practical consideration as to whether or not there’s a solid business rationale for doing so. Something might seem captivating today because it’s shiny and new, but will there be any real spot for it in the company six months from now?


Along these same lines is the phenomenon in which the entrepreneur uses only a few aspects of what the technology provides. A 2019 survey of small business owners found that more than 40% were not using technology to its fullest potential. It would be the equivalent of spending a thousand dollars on a new stove yet only using it to boil water. This can sometimes occur when a purchaser is lulled into the false belief that a piece of new tech will solve all their problems, causing nothing more than a superficial investigation of the full features and functionality, which can cause an otherwise useful digital tool to end up being dramatically under-utilized.


The inverse can also be true. When not correctly researching what’s needed, some business owners will invest an excessive amount of money in components for which they’re likely never to find practical use. The “bells and whistles” syndrome is often the result of high-pressure sales tactics, and the unsuspecting buyer who hasn’t taken the time to establish clear-cut parameters as to what’s truly needed can end up wasting revenue by purchasing useless ad-ons that are unlikely ever to benefit the business. Doing so can also create a burdensome experience for anyone in the company who will utilize the technology. Cramming it with pointless nonessentials will create a cumbersome user experience and likely erode productivity rather than enhance it.


A 2024 survey conducted by Slack, A Salesforce company, documented that half of those small businesses planning on increasing their operating budgets are planning on allocating that extra spending toward technology. If you want to bring new tools to the fore in your small business, the commitment to make a financial investment in increasing your toolbox is a healthy start, but you need to make prudent decisions from now on. Ensure that your time and money are well spent by involving the input of colleagues or seeking outside counsel if you genuinely are a one-person operation. This research is the best way to acquire technology because no single individual can hope to have enough insight to know exactly what should be pursued.


Once you’ve garnered the input of others and have a clearer understanding of what you’re hoping to achieve with the new tech, one of the first aspects to consider is cost. Especially if your operating budget is tight, believing that the cheapest option is the best way to go can be incredibly tempting. Interestingly, this isn’t inherently wrong – there can be valid scenarios in which a low-cost or no-cost solution makes prudent sense. Depending on what you’re hoping the technology can do for you, finding freeware that addresses your needs may be possible. This can be a good option when you lack the necessary resources to invest in anything else, but you must approach doing so with the proper mindset.


Some free technology is open-source and supported by a robust user community. This means that those who use it can constantly improve it, and most persons with the insight and skillset to do so usually have no problem sharing their modifications with others. These communities can become highly interactive, with people willing to express their knowledge and experiences in online forums to benefit everyone. The very nature of the software being made available without someone hoping to benefit from it financially tends to foster a collaborative rather than competitive sphere, and small business owners operating on a dime might find this a practical (and risk-free) option for introducing new technology into their operations.


Since freeware often lacks the polished user interfaces common to paid products, you may feel it’s something you don’t want to pursue, leaning instead toward a more user-friendly experience. If you determine that what you’re looking for only exists with an associated cost, one prudent approach is to look for options that include either a free version or a free trial of the standard version. Be aware that free versions are often a stripped-down variation of the premium product, so it’s all the more important to adequately research the functionality the standard version offers to ensure that you’re not missing out on some key features you need.


If there’s no free version available, another viable option is to look for products that offer a free trial. This can be a great way to “test drive” the product to see if it will work for you and determine which specific iteration of the technology will best suit your needs. The old adage about getting what you pay for is true, some of the time. But weighing the options of paid technology solutions isn’t always as straightforward as it seems. This is where you need to have a discerning eye, being willing to look carefully at what differentiates one price point from the other. Be careful not to “cheap it out” and settle for something less than you need to save money now. Unless there’s an easy upgrade option, don’t just go for the least expensive option – make sure the tool is well-suited to your purposes.


When deciding what to invest in, looking at all the components that will influence that financial decision is crucial. If you purchase a product in which you need a separate license for whoever will be using it, be sure you read all the fine print when it comes to adding or renewing existing licenses. Always be sure that there are no potential hidden costs that won’t make themselves evident until you suddenly have to bring more people into the equation. A healthy return on investment must be the underlying measuring stick for your technology investments. Be mindful of factors that could end up comprising the cost-effectiveness of your purchase in the long run.


The last and perhaps most important point is that there will automatically be a learning curve. There’s simply no avoiding this, and it will hold true whether you pursue a free or purchased solution. The promise of quick and positive change in your business will likely dim in the light of the reality that you, and anyone else working with you, will need to actually learn how to use this new technology. You must carefully balance this against the existing demands of operating your business – you can’t expect people to spend eight hours a day learning a new technology while still getting their regular work done. And everyone investing in technology will likely experience at least some buyer’s remorse. When the enthusiasm of the initial purchase wears off, it can be tempting to regret taking that step, but be patient enough to work through the inevitable rough spots and remember the long-term potential of what you’re doing.


If your small business has been struggling, consider exploring technological options that could help you overcome existing obstacles and reach uncharted territory. Just be certain to maintain a sober balance while you do so, always giving equal consideration to what your business needs to keep doing and what it should try to start doing.

 

Ready to revolutionize your small business with tailored tech investment strategies? Contact us at ValorExcel today, and let's elevate your business to new heights together! 💼💡 Visit https://www.valorexcel.com/book-online, to book your power hour session where you’ll meet with ValorExcel staff to assess your needs and develop a plan to help you reach your short and long term goals. Or, you can email us at info@valorexcel.com, or call 240-329-9387. Then, don't forget to check our recent videos on YouTube by clicking HERE. #TechInvestment #SmallBusinessGrowth #DigitalTransformation


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