Equipment and Technology
Over the last decade there has been an explosion in the number of high-quality, affordable technologies that are specifically geared towards small, local businesses. This includes point of sale systems, tax software, bookkeeping software, employee scheduling and payroll programs, inventory tracking tools, customer loyalty programs, gift card technology, e-commerce opportunities, website builders, email marketing software, social media management tools, and the list goes on.
For small business owners, these technologies present an incredible opportunity for them to better understand and grow their businesses in a lean, data-driven, and time-efficient manner. However, when you couple the breadth of technology options with decisions about basic store and restaurant equipment, such as espresso machines or air conditioning units, it can become a little overwhelming sometimes to figure what is actually worth the investment.
Choosing the Right Investments
Your three most valuable commodities as a small business owner are time, information, and cold, hard cash. The ability to judiciously marshal these precious resources will define, more than anything else, your chances of long-term success. It is with this understanding clearly in mind that all potential investments in equipment and technology should be evaluated.
Perhaps the key term to consider when making this kind of decision is Opportunity Cost.
opportunity cost n.
The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.
While there is always a cost associated with technology and equipment investments, business owners often fail to consider the cost of not making the same investments. If you don’t invest in good technology and the best equipment, you might end up costing yourself a lot more in the future.
Would that technology have given you more information about your customers’ buying habits? Could it have given you more insight about your most productive employees? How many times has the old espresso machine broken down during the morning rush?
To put it more more prosaically, at a certain point, sticking with that rusty, second-hand refrigerator is going to cost you more in electricity and repairs than just buying a shiny new one.
At a Glance:
- Small business owners survive and thrive by marshaling three key resources: money, time, and business data. The right technology and equipment investments deliver more of all three.
- Every investment has both a cost to your business and a potential benefit. When evaluating your requirements, it’s easy to be put off by up-front costs and not pay enough attention to the long-term gains.
- Small business owners are enjoying a gold rush of valuable and affordable new technologies. The barrier-to-entry of high hardware costs has been removed, leaving you to experiment and find the right technology through trial and error.
- The right technology and equipment investments will improve the way your customer experiences your store or restaurant.
“Beware suppliers bearing gifts. That ‘free’ refrigerator from the drinks supplier is never really free. You can quickly find yourself tied into sub-optimal deals because of a reliance on this hardware. If you have access to the capital, do yourself a favor: Buy your own fridge and negotiate from a position of strength.” – Jason Richelson, Founder and CEO of ShopKeep and Experienced Small Business Owner
The Software as a Service (SaaS) Revolution
Up until about ten years ago, if you wanted to use the all the technologies listed at the start of this section, you’d have needed to take out a second mortgage to cover the bill. Investing in technology usually involved expensive hardware (including an in-house server), large up-front software costs, and hefty ongoing bills for customer support or repairs when things went wrong. Innovators were targeting large-scale enterprises like Coca-Cola, not local mom-and-pops, so the packages and price points were designed to match.
Luckily, recent times have seen a revolution in small business technology. The advent of cloud-based technology has made it possible for a small startup company to build a product and have it used (and paid for) by retailers and restaurateurs all over the world. As a result, the number of companies targeting their innovations directly at you and your small business has exploded, leaving you with more choice, at a better price, than ever before.
These new companies no longer charge crazy up-front fees, moving instead to what’s known as a “SaaS” monthly subscription model, often with a free trial period. Therefore, the risk of trying a new product is greatly reduced, as you are required to pay little or nothing up front. Even Microsoft has announced they’ll be moving their flagship product, Microsoft Office, to this pricing model.
So, what does all this mean for you? It means there has never been a better and cheaper time to weave technology into the fabric of everything you do as a small business owner.
As with all things related to your store, it’s critical to put your customer at the core of your decision making. When you’re evaluating new equipment and technology, ask yourself: Will this equipment or technology give your staff more time to spend “wowing” customers? Will it improve your day-to-day customer experience? Remember, customers also have higher standards and more choice than ever before. Little things like cold drinks that aren’t quite cold enough can turn a customer off your store forever.
The right technology and equipment investments should be considered in conjunction with your store design. They should seamlessly integrate with and improve the customer experience in your store. Everyone remembers their first trip to the Apple store and the “wow” moment of having their sale rung up by the assistant in the middle of the store, rather than having to wait in a line. Fewer people probably notice the carefully positioned heater that makes them feel warmed and invited when they walk through the door, but it’s all part of the same idea.
Make sure to check out government surplus auctions, which sell extra government equipment, as well as seized goods. Auctions as a result of foreclosures are also often a great way to find a deal.
Whether you end up looking at self-checkout counters, fancy lighting systems, special refrigerated cases, or any of a countless number of options, never forget that these are only tools to help accomplish your main goal. Your store needs to create an environment where customers want to be, where they feel comfortable and appreciated, and where that experience will prompt them to purchase (and hopefully encourage their friends to do the same). Equipment and technology decisions should always be made with the customer in mind.
Cloud-Based Business Guide
The best tools and advice to help you more reliably manage your business from anywhere at anytime.
Read the next section of Small Business 101, Inventory Management >>