Small business owners know that rapidly changing technologies offer great potential for profit. But with countless technology offerings and few clear ways to weed out gems from the fads, it’s easy to get overwhelmed.
“Small business owners are masters at their craft, and one of the challenges they often have is wearing all the other hats,” says Ken Yancey, CEO of SCORE, a small business counseling and mentorship non-profit. “They’re being forced to make decisions about technology, timing of implementation, the impact that technology is going to have on their business — and the ROI it will deliver — often without a professional to help. That creates a serious level of frustration.”
According to a recent survey by SCORE and printer maker Brother International Corporation, 63% of U.S. small business owners of companies with less than 100 employees feel overwhelmed by the technology choices available to help run their businesses. A staggering 72% of the 500 respondents said new technologies would offer a bigger ROI in 2014 than new employees, and yet half of those surveyed were torn on which was a bigger risk: investing too quickly in a potentially unsuccessful technology, or missing out on the next big thing altogether and falling behind competitors.
Find a Technology Advisor
Your top priority should be to find a trusted advisor to help you navigate the “tectonic shifts in how technology can impact your business,” advises Laurie McCabe, co-founder and partner at consulting firm SMB Group.
“If you run a hair salon, a dental practice, or even a small manufacturing outfit, then technology isn’t the core of your expertise,” says McCabe. You need someone to help you identify which megatrends will help and which don’t matter as much. There are always new POS products, accounting software, social media tools and more coming out; it’s crucial to discern what’s actually going to improve your bottom line.
“We’re all racing into the future at lightning speed to incorporate new technology,” McCabe adds. Five years ago you could get away with an IT generalist or a “break-fix guy” to call when problems arose, she adds, but today’s entrepreneurs need to stay ahead not only of their competitors, but also of their own customers’ technology needs as well.
Yancey says to ask yourself the key question: What technologies are available to me that will make my business more efficient, more effective and more profitable? The answer you come up with should be in your business plan from day one, and should be reevaluated right along with your business plan at least once a year.
Use Your Data
Analytics is an often-overlooked way of assessing your technology needs, yet too many small business owners think they don’t have enough data for actionable insights— or they’re too intimidated to do anything with what data they do have.
“It doesn’t matter how much data you have,” McCabe says. Because analysis in Excel (or other programs) can seem altogether too daunting, a lot of entrepreneurs will just shoot from the hip when making key decisions. “If everyone shot that way it would be a level playing field, but it’s not like that; instead of worrying about big data and fancy terminology, start with the data you’re already paying for.”
This includes the applications you use every day like Salesforce, QuickBooks and Google Analytics.
Make Your Technology Work Together
“If you’ve been in business a while, the infrastructure you have in place is probably not up to the job of what it needs to support,” McCabe cautions, “if you just grab at those bright shiny objects without a framework of where you’re going, you’ll end up with a huge time suck of cloud apps that don’t talk to each other and mobile devices that lack security."
Finding a managed service provider isn’t easy, McCabe concedes. She recommends networking with other business owners in your area for recommendations, and then interviewing prospective candidates as you would with any potential employee.
By leveraging integrated technology, data analysis, and with the help of an advisor, you can take the friction out of the way you do business, creating a better experience for your customers, your employees, and for you.
Jared is the CEO of Fundera, an online marketplace that matches small business owners to lenders. Prior to Fundera, Jared co-founded GroupMe, a group messaging service that in August 2011 was acquired by Skype, which was subsequently acquired by Microsoft in October 2011. He currently serves on the Advisory Board of the Columbia University Entrepreneurship Organization and is an investor and advisor to startups such as Codecademy, SmartThings and TransferWise.