Scott Gerber is the founder of Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most successful young Scott Gerber is the founder of Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most successful young entrepreneurs. YEC members represent nearly every industry, generate billions of dollars in revenue each year and have created tens of thousands of jobs. Learn more at yec.co.
In the modern business world, staying ahead of the curve means making sure your technology is efficient and up-to-date. But this doesn’t mean you need to go out and buy every new gadget or software that hits the market. In fact, investing in a technology that doesn’t serve a clear business purpose will only lose you time and money in the long run.
To help determine whether you should move forward with a potential tech investment, we asked members of YEC what business owners should consider and ask themselves prior to making a commitment.
What one litmus test should all business owners perform before investing in a new technology?
Their best answers are below:
1. Is this solution scalable?
As an owner, you need to solve for today but keep an eye on the future. Make sure the time and energy of a new technology scales. To me, these are investments in the future of the business: You have to consider all the factors, not just speed to implementation or price. Too often I see entrepreneurs choose a low-cost option, which becomes much more expensive for the business down the road. – Jeff Epstein, Ambassador
2. Will it integrate with our current systems?
Before investing in any new technology, you need to ensure it integrates with your existing technology. I’ve invested in new software that promised the world, but didn’t directly integrate with my email marketing software. I ended up having to duct tape them together with a tool called Zapier. The API was constantly breaking and had to be monitored. In the end, it wasted more time than it saved. – Bryan Kesler, CPA Exam Guide
3. What real change will it bring to my business?
You need to make sure it’s really going to change what you can do before you invest and spend that money. That means seeing the difference it makes in the time you spend on certain things and theamount of results you get from that technology. Weigh the cost and see if it’s worth it in the savings it delivers. – Drew Hendricks, Buttercup
4. Can I find a relevant use case for my business?
Having had a lot of interaction with software-based sales strategies, we’ve found that a large churn factor is that the client didn’t look deeply enough at their own business needs prior to purchase. Going into relevant use case scenarios is really important when purchasing potential software. – Nicole Munoz, Start Ranking Now
5. What does the customer support and product development look like?
Many technologies end up becoming a core part of your business, and they are sometimes hard to replace and switch away from in the future. Therefore, it is extremely important to make sure you trustthe company that services, upgrades and produces what you are implementing. If they fail, or don’t have good service, or don’t properly maintain and upgrade their products, you could be left stranded! – Justin Faerman, Conscious Lifestyle Magazine
6. Does it solve a problem that is costing me money or time?
Can you quantify how much the new technology will save you? It doesn’t have to be exactly calculated, but it’s important to estimate what possible tangible benefit this investment would be providing. There are a lot of shiny new technologies that can cost a lot to get in place and might not actually be financially beneficial for your business. – Baruch Labunski, Rank Secure
7. Do I understand it?
All too often business owners make decisions related to technology that they do not understand. As most business owners are not technologists, they can invest in new technology without comprehending what they are spending money on. If you do not understand the technology you are considering investing in, engage a trusted expert who can help you make the right call. – Adam Mendler, Custom Tobacco
8. Is it 10 times cheaper or better?
A lot of hidden costs come with integrating a new technology, including time, setup fees or just taking your team members off of other lucrative projects to focus on something new. All costs need to be considered, but as a rule of thumb, the new system should either save you a lot of money, make you a lot of money or be 10 times better than what you were using to make it worthwhile to switch. – Andy Karuza, FenSens
9. Can you get an equivalent solution for free?
Anytime I think about investing in new structural technology, particularly for things like communication or organization, I evaluate all the alternatives I don’t have to pay for. There are some pretty high-quality services available either free or dirt cheap, and combining them can often give you the capabilities of more comprehensive software without the price tag. – Ben Lee, Neon Roots
10. Can I just improve on my current technology?
I always try to ask myself why I need this new technology, and if it is worth the energy to implement it versus just improving what we currently have. It might be exciting at first, but might take months to fully implement. – Jessica Gonzalez, InCharged
11. Do I have a good (existing) reason for switching?
Ask yourself, “Is this just an idea that fell in my lap, or is this a solution to a problem that I would have been researching anyway?” If the only reason you can think of to implement a new technology is that it’s available, then it won’t be effective in the short or long term for your business. Don’t invent problems for yourself that didn’t exist before. – Roger Lee, Captain401
12. What are others in my industry using?
Understand the tools your competitors are using to make sure you’re not falling behind. You can find out what they’re using by reading job posts or news articles. If everyone in your industry is using a certain tool, it makes sense to take a look at it to see if it would make your life easier. – Syed Balkhi, OptinMonster
13. Does my team like it?
Before you invest in a new technology, it’s important to get a feel for how well it will fit your company. After all, some tools might look great on paper, but won’t actually mesh with your current processes or culture. Look for solutions that offer trial periods and tailored training. These will help you determine how your company can best use the solution, and whether it’s worth your investment. – Stan Garber, Scout RFP
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