Tech For Start-ups: 5 Tips To Lower Your IT Costs
Tech For Start-ups: 5 Tips To Lower Your IT Costs
How to Lower IT Costs for Start-ups
Part of finding success as a start-up is knowing how to manage your finances. In those early days when you don’t have a lot of money to play with, it’s important to consider how you can make that money last and what expenses are the most necessary. A lot of this relates to knowing what to prioritise and trialling different ways to reduce outgoings. As your company grows, more costs arise and it is essential that you know how to deal with them. Poor money management could do serious damage to your business.
We live in the digital age and as a result, an expensive part of running any business, regardless of the industry, is IT costs. IT spending can cover a whole range of different areas such as IT personnel, business applications, data protection, and end-user technology. Studies show that IT costs usually makeup around 20% of a new business’ expenditure and many people have the misconception that they are costs that can’t be cut. However, there are lots of ways that you can reduce your IT costs and implement more efficient IT spending which will allow you to spend money where your startup needs it most. Here are five top tips on how to lower your business IT costs.
1. Regularly Assess Your IT Situation
Given that we live in an age where technology is always changing, it is important to that you are regularly assessing and reviewing your current IT situation and reflecting on whether or not it is working for you and your business. This means considering how cost-effective your current setup is, how efficiently your business is operating and what improvements you could make.
It is also a good idea to stay abreast of the different costs associated with IT spending and compare your costs to others on the market in order to ensure that you are getting the best price possible. By doing this, you are sure to find out if there is a cheaper alternative that could replace your current method. It is also worth knowing how different systems in your startup work and software is used because this will allow you to make more informed decisions when it comes to finding new software or consolidating your software and services. If you are not that tech-savvy, taking an online course in your spare time could make a big difference to your business.
2. Switch To Cloud-Based Technology
You can make significant savings by switching over to cloud-based technology. A recent study found that almost 90% of cloud users have saved money and almost 60% thought that cloud computing actually helped to boost the business’ profits. The best way to look at cloud computing is the analogy that it is often cheaper to rent than to buy. Rather than spending a lot of money on in-house IT servers and on staff to maintain IT infrastructure, your costs will mainly be operating expenses.
Cloud computing is easy to set-up and makes telecommuting a lot easier, especially in the early days of your business. Using web-based software means that you will save on installation, maintenance and IT support costs. Try and negotiate for the best price possible for these types of services.
3. Have A High Level Of Automation
Automating processes within your startup can increase productivity and make basic operations run more efficiently. By using automation, you can lower costs and optimise your employees’ time. When you’re starting your business, you and your team members do not want to spend valuable time doing menial tasks such as data entry or invoicing. Instead, setting up automation for these kinds of tasks means that you and your staff can focus on more important activities and you can expect more productivity.
This is cost-effective because it will keep your employees happy and high employee turnover is expensive. As well as this, time is money when it comes to startups and automation saves you time and can improve the accuracy of certain tasks. Accuracy in data is particularly important when it comes to your finances as you need accurate information to make the best decisions.
4. Consider Your Communications
You can lower costs for your startup by considering the way that you communicate with your employees and clients. The benefit of living in the digital age is that as a startup you don’t need to spend a lot of money on telecommunications. Rather than spending money on unnecessary services, such as setting up a phone system or spending a lot of money on phone bills, use web-based services such as Skype and Google voice. You can use this as a way of interacting with clients and to catch up with employees.
5. Introduce Telecommuting
Telecommuting is the way of the future and it can save your startup some serious money. With today’s technology, many people can work from home just as easily and efficiently as they would work from the office. Both the business and your employees can save money this way. Research suggests that by letting just one employee work from home, a business can save up to $10,000 annually and the employee can save almost $7000 themselves by not commuting.
Telecommuting can save money by giving you more flexibility in who you hire to work for you, meaning you have more access to your industry’s top talents. It also cuts down your company expenses, such as travel, office space, utilities and supplies.
What’s more, telecommuting has shown to increase employees’ productivity by allowing them to work in an environment they’re comfortable in and have a better work-life balance. Such flexibility usually increases employee loyalty and reduces absenteeism which will save you money as well.
How To Lower IT Costs
Lowering your IT costs is a continual process and as your business grows, the means of reducing your IT expenses might change. You need to always be thinking strategically and planning ahead when it comes to developing your startup and the same goes for your IT situation. By staying on top of the latest technology, such as cloud-based solutions and internet-based software, and the costs of certain software, you can ensure that your business operates efficiently, helping to make a profit rather than a loss.