Changing How You Pay For Small Business Technology
The main factor behind businesses failures in Australia is inadequate cash flow, with the Australian Securities and Investments Commission saying this accounted for 44 per cent of closures in the 2014-15 financial year. Of course, no matter the size or nature of a business, it all comes down to making enough money.
But if you run a small business, the need to make things work financially is much more acute. There’s just no buffer. You don’t have different divisions that can support each other through lean periods, or the industry weight to decide that you’ll pay an invoice when you’re good and ready.
Even if you are generating a solid profit, you may not be able to tell from your cashflow, since Australia’s reputation for a laidback approach extends to bill payment. A survey of 19 countries by Market Invoice found that Australia is the worst at payment, with the average business invoice paid a whopping 26 days after it was due. This is nearly eight days after the next slowest payer, Mexico. In fact, Dun & Bradstreet estimates more than $19 billion of Australian cashflow is tied up in late payments every year and small business bears the brunt of it.
In such a climate, any move that increases your cashflow is worth pursuing. A CompTIA survey found that 58 per cent of small and mid-sized businesses (SMBs) felt that reducing costs was a strategic priority, slightly more than those who cited reaching new customers.
One area that is often overlooked is how you spend your IT budget. Having the right technology can make a real difference, both in what you spend and what you can use it for, but small businesses often have a difficult relationship with IT. The same CompTIA survey found only 17 per cent of SMBs are where they want to be with their technology.
The problem is that without dedicated IT staff, small business struggle to take a holistic approach. Spending tends to be ad hoc, essentially governed by someone justifying the need for it, without a lot of planning or thought about how it fits into your overall business. This makes it unlikely that you’ll get the right solutions at the right price.
This explains why small businesses have been quick to adopt cloud services. By swapping the large upfront investments and long implementation periods of traditional IT for a flexible and scalable internet-based system, they can access enterprise-grade technology on a small business budget.
This means you’re not paying for resources you don’t need. You’re only paying for the hardware, software and services that you’re using and you’re also sparing yourself the costs of in-house support and maintenance.
With cloud services running anywhere the internet is available, it allows knock-on savings in other areas of business. For example, a more mobile workforce allows you to lease smaller office space because people can work from home.
And with flexible but predictable payments, you’re not committing yourself to technology that will no longer be suitable as your business grows. Instead of IT that’s highly customised for right now, you can get a solution that adjusts to your changing needs.
Google research suggests the average cost reduction in moving to the cloud for a business with between 1 and 15 computer users is 71 per cent. Small businesses using internet-based telephony save up to 69 per cent on hardware and call costs, compared to traditional phone systems, according to VirtualPBX.
Keeping It Simple
Moving storage and software to the cloud is part of the solution, but that’s not the only way to move your technology spending from a large initial investment to an ongoing regular payment. Technology bundles allow you to combine basic office productivity hardware like phones and computers onto the same bill as your storage, cloud software and internet telephony.
Having everything on one bill means you can track how much you’re spending, breaking it down per employee if needed. You’ll know exactly where you are in the hardware lifecycle without having to hunt through piles of receipts.
And with one number to call for service and support, you’re not wasting time trying to identify the right vendor. Similarly, new employees can be quickly onboarded with minimal input and access the system with a single login, which allows them to quickly get on with the job.
Money is tight when you’re a small business owner, you can’t afford to see it tied-up in technology that doesn’t offer you the flexibility and mobility you need
This article originally appeared in My Business.