Being a small business owner in today’s environment can be daunting. While large enterprises have big marketing budgets, brand recognition, and general weight in the industry, small businesses always need more, with less.
This is why, irrespective of the sector in which it operates, any smaller entity needs to be cash smart, and one way to do this is, instead of investing in either hardware or skills, to consider an alternative approach, such as renting the equipment or outsourcing the skills they need.
So says Johannes Groenewald, General Manager, Demand Factory, at SA’s leading ICT distributor, Tarsus Distribution. “Smaller entities need to carefully consider the real costs before investing their hard-earned cash in a new, permanent hire or project that requires heavy upfront capital investments. Although the hourly rate for a payroll practitioner might be higher than hiring a full-time employee, if you outsource, you end up only paying for the time that you really need, and it is easier to switch service providers should your requirements change over time.”
Small organisations should avoid over-investing in new technologies, particularly when that specific tool or solution could be acquired for free, or with a small monthly subscription, says Groenewald. “We see many smaller businesses rush to buy the latest technology before they have really considered the ramifications of setting it up and maintaining the technology through thorough research and comparison of options. Buying technology for the sake of it, can often prove to be a costly mistake.”
He says a prime example of this is an enterprise resource planning or ERP system. “There are several financial institutions that offer their clients access to an ERP system at no cost. For small businesses, where every cent counts, this is a compelling opportunity, as they could end up saving a fortune, not only in upfront investment costs, but in implementation costs, training on the solution and the people to manage it.”
According to him, it is critical for small business owners to protect their bottom line and liquidity by viewing any potential investments with the utmost caution. “Many SME owners are a little naïve when it comes to finances, which is something we see at times among our channel partners. Too often, when they start selling the more complex or advanced technology solutions, they wake up to the fact that they need a qualified pre-sales engineer, and they rush to bring one on board. However, it would be a far better idea to simply contract these skills from a vendor on an hourly basis. The end-customer might not even be aware that the partner doesn’t employ the engineer on a full-time basis, and will still have confidence in the channel partner’s ability to provide the support for the solution they have just invested in. The channel partner benefits by not having another staff member on its monthly wage bill, particularly one that costs a premium, and who they only need every now and again.”
Moreover, he says a slew of off-the-shelf solutions are available to small businesses to get them started, and while these might not be state-of-the-art, or come with all the features of a custom-built solution, they will offer enough functionality to address any immediate and basic business needs until the company can afford a custom-built option.
Groenewald says by carefully planning their strategies and investments, smaller companies can save a significant amount of money via outsourcing their technology, platforms as well as other solutions. Here again, he says the conversation about renting versus buying hardware needs to be had, and the same can be said about the skills and human resources that the company might need. It makes more sense to rent in both cases until the business reaches the point where it can afford to invest in human capital and technology. “Smaller businesses should always do thorough research and, where possible, chat to their small business counterparts to get good advice from those in a similar situation, before making any firm decisions about investments.”
Groenewald offers another piece of advice to small business owners: “There are times when running a small company can be quite a lonely endeavour. Signing up for, and getting involved in networking groups specifically aimed at small companies, such as their local business chamber, BNI or Rotary, can help them to meet like-minded people, and can share and learn from each other’s experiences over the years.”
These groups can also help channel partners expand their customer bases, which will give them an opportunity to sell even more solutions. Here again, if they don’t have the skills to support those solutions, they can bring them on board at an hourly rate from the vendor, or they could partner with Tarsus Distribution and white label these skilled resources as their value offering when they engage with and deliver to their customer. This gives the customer the confidence of knowing that the channel partner has access to the skills they need.
Doing more with less, and growing revenue is a real challenge for small businesses in every sector, he concludes. However, it is possible to take the business from strength to strength by investing wisely in all the ways already discussed. “If they take this advice on board, smaller businesses can grow, and present themselves as capable, solid entities without having to outlay capital for more technologies and staff.”
For any channel partners or businesses that are interested in engaging with Tarsus Distribution for assistance with your technology needs, you are invited to reach out to us here.