Cash flow issues can strangle businesses, especially when unexpected expenses arise. For this reason, business owners should always monitor their finances and minimize waste. However, when the time comes to invest in technology, some entrepreneurs instinctively overspend. Here’s how.
5 Ways Entrepreneurs Overspend on Technology
Spending money doesn’t guarantee that you solve any problems. In your business, look out for the following 5 ways entrepreneurs overspend on technology and avoid them.
Bells and Whistles
As an entrepreneur, you probably already know that technology can boost your productivity and that of your team. However, although many software products and hardware devices have “cool” features, not all of them can contribute in a positive way to your bottom line.
Before buying anything, carefully assess the needs of your business and then compare it to the capabilities of the product you intend to buy. More often than not, you may discover that you can save a lot of money by buying something with fewer options.
In other words, balance is essential to avoid overspending on technology. You must insist on getting the right tools for the job, but you also must avoid spending money on capabilities that you know you will never use.
Ink and Toner
After investing in a new printer, you can expect to experience ongoing costs of ownership, primarily printer ink. Even when you choose an efficient printer, you can sometimes expect to pay more, over time, for replacement ink and toner cartridges than what you spend on the unit.
By carefully monitoring the use of your printer and investing in separate paperless office technology, you can begin to stretch the money you spend on operating your printers. Even then, you may still overspend.
Try shopping around for printer supplies to get a better price than what you might get from either the manufacturer or big-box office store. Furthermore, third-party ink providers exist that can often cut your ink expense by as much as one-half.
You’re important. After all, you own a business. So, it probably feels good to fly around the country and world meeting clients and closing deals.
Unfortunately, your travel expenses can eat into your profits. Moreover, your business travel can give your company’s reputation for social responsibility.
So, consider using technology next time you feel like hopping on a jet to discuss business strategy with a partner or meet with a new client.
Video conferencing, virtual meetings, instant messaging, and chat are some of the ways you can communicate with faraway individuals without wasting time, money, energy, or the environment.
Many entrepreneurs feel disappointed after they invest in technology. After all, they expect a massive ROI. Unfortunately, they forget that they need to learn how to use
So, rather than walking away after throwing new gadgets and software at your team, invest time and money in an organized training program. Sometimes, you can have your vendor’s training crew visit your facility to provide hands-on training. Other times, online training options suffice.
Also, consider building an in-house training and development program. Put employees with proficiency in a particular system in charge of training your new hires.
Although training adds to your general expenses, the productivity and efficiency that results will provide adequate compensation.
Servers, computer workstations, servers, and firewalls cost a lot of money to buy and maintain. Furthermore, you may lack the necessary expertise to set up, secure, and manage a data network.
Rather than spending a lot of money on IT gear, consider leveraging the cloud.
When you use cloud-based software applications, you and your team can work from anywhere without sacrificing security. Also, your software service provider manages security and application updates, so you can stay focused on your work.
Make sure that everything you buy for your business contributes to its mission. If you don’t you can easily waste money on shiny high-tech toys. For example, you may decide to buy a 3D printer for some unspecified possible future use.
So, if you think your needs may change in the future, plan for it. Buying things on impulse or wishful thinking can tie up the cash you need to buy inventory and pay for unexpected expenses.
In the end, technology can help entrepreneurs accomplish a lot while keeping costs low. Simply by being aware of how many business owners overspend on technology, you can renew your resolve to make wise use of your limited funds.