The Right and Wrong Time to Invest in New Business Equipment
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Scalability is always a concern for business owners. Whether you’re new to your industry and you’re relying on cheaper solutions for now or if you’re a larger company that’s having trouble coping with growing pains, it’s important to focus on the right and wrong times to actually upgrade your business.
More often than not, companies will start investing in new equipment and technology the moment they see some success. They manage to build some capital and they’re excited about the prospects of growing their company, hence why they decide to pour more money into their technology or equipment in order to grow.
However, if you do this at the wrong time then it can be a disastrous mistake. Let’s face it, the idea of growing your business can be enticing and it will often lead you to make decisions far too quickly. There’s a right and a wrong time to upgrade, so in this article, we’re going to discuss the correct time to invest your capital and when you should hold off.
The Wrong Time to Upgrade Your Business Technology
You’re Unsure About Your Business Model
Some businesses see success only during specific seasons and others get a huge influx of customers at certain times. Your success could be seasonal or it could be due to a trend. If you’re unsure why you’re successful then there’s a good chance that your business model is still unclear and you might suddenly have a drought of customers due to the way your industry works.
For instance, fashion businesses are typically seasonal because once a new collection is released, people tend to invest a lot of money into new clothes. However, between new collection releases, there doesn’t tend to be much financial activity because the companies are working on new lineups of clothing and accessories.
This means that, for a fashion business, your success comes in waves and you can’t determine how successful you are off a single season. You need to wait and see how your income is determined over a longer period of time so that you don’t invest too much of your capital into something and then fail to pay your employees or lack the funds to out-promote your competition. It’s a tough decision to make, but you need to have a complete grasp of how your income looks if you want the best for your business.
You Don’t Have the Right Employees
You also need to think about who is going to use the upgraded business equipment. You may have heard about a new type of software or a new cloud application that all of the other big industry names are using, but if you’re unsure how it’s going to fit into your business workflow then you’re going to have trouble coping with its use in your own company.
Think of it this way; if you don’t have the right employees to make use of your upgrades then there’s a good chance that it’s not the right time to upgrade. For example, if you’re a graphic design studio that is currently working with traditional graphics tablets, then do you really need to purchase a high-powered computer that is capable of 3D modeling if you currently don’t have someone qualified to use it? It’s an expensive investment that makes sense for a design studio, but if you haven’t got someone dedicated to 3D design yet then you won’t make much use of it.
Another example is in the construction industry. A bottom dump trailer is a common upgrade for construction companies that are looking to expand into road building services. However, if you don’t have other types of equipment or the right skills, knowledge and employees to take on road building, then it’s not a great upgrade. However, if you do have the right contracts and people to take on a task such as road building, then it does make sense and should be considered a worthwhile upgrade.
In short, if your equipment investment can’t be put to use straight away, then there’s a good chance that it’s a waste of money and your capital can be better spent elsewhere.
The Right Time to Upgrade Your Business Technology
You’re Facing Limitations in Your Workflow
One of the best times to upgrade is if you’re facing limitations in your workflow. For instance, perhaps a computer is starting to get too old or maybe your customer data is starting to overload your networked storage. Perhaps you’re burning through ink too quickly on your office printer and you need an upgrade to a laser one to provide more cost-effective prints. Either way, you need to think about how technology and new business equipment can help you overcome limitations in your business.
However, you should also think about the cost-effectiveness of your future upgrades. A good example would be for computer upgrades. Do you purchase extra components and install them yourself because you have a tech specialist in your company, or do you hire a service to help you do it? Do you try to prolong the life of your computer and continue working with slower components, or do you aim for an upgrade that makes life easier for your employees?
There are many decisions to make when upgrading your business technology, but it’s always good to consider the limitations your new investments will overcome and just how effective it will be at improving your overall workflow. However, if you’re already facing bottlenecks, then a tech investment is a good idea.
You’ve Recently Added New Employees
As your reputation increases, so will your employee numbers. As you recruit more people, you’re going to need to scale up your technology solutions to ensure that you have enough computers and equipment for everyone to use. If you’ve recently added a wave of extra staff then it’s also a good time to invest in new business equipment to ensure that they can work just as efficiently as your existing employees.
You never want to have employees working on outdated computers or half-working equipment that barely functions. Not only does this give off a bad impression, it also makes that new member of staff less productive and it becomes difficult to gauge just how much of a difference they make to your business.
