I don’t think I’ve ever met a tech release that I didn’t like—I want it all. I can acknowledge from the first commercials and internet buzz that it might not be something I would personally use, but I tend to be of the mindset that the two kinds of new tech are those that would make my life better and those that would likely make someone else’s life better. My personal purchases have gone the gambit from realizing a year later that I only used the thing once, to “at last my arm is complete again” when upgrading my iPhone. We’ve all bought at least one dumb thing, and I forgive all of you yours while assuming you forgive me mine.
But when you’re purchasing for a company, everything changes. Your financial success is on the line, not just because you’re spending a lot of money, but because choosing what, if anything, to buy is directly linked to how well you do your job.
When looking to make an upgrade for your business, consider these points:
Will this make me money? Will this solve a problem, allow you to do more kinds of work, a larger quantity of work, or save you an expense somewhere else? For example, if you could suddenly digest in the background, you’d either save money in hours spent or be able to do more work in those hours, so that one change would generate income or offset costs. If it makes money or stops a “bleed,” it’s a need. If something is broken and you can’t effectively work, the repair, as expensive as it may be, takes you from zero dollars back to your usual income, which makes you money, even if you’re just putting things back the way they were working last week.
How much money is it likely to make me? Is this a tiny change or a huge improvement? If your editors are forced to wait for the content to be ready for a total of two hours each a day per editor, speckled throughout in 10 to 30 minute chunks, you’d be able to increase efficiency by 25% if you could do away with those hours of waiting. Using your best judgement and being conservative, come up with a rough dollar amount that you expect to see if you implemented the upgrade. And if there isn’t any, it’s definitely not a need.
How much does this upgrade cost? Keep in mind that all things break in time, so a system that last up to 20 years would be more cost effective than something that costs slightly less but would only sustain you for two years, and it may make more sense to look at the expenses expressed annually. Be sure to include things like maintenance in your estimate.
Compare the numbers. If it would cost you more money than it would make you, maybe now isn’t the time. If it’s close to zeroing out, you should really consider taking the leap and investing in you. If you would be making more money, that’s a no-brainer.
Current financial status is important, but not as important as the month to month math. Most people don’t have $40,000 in liquid cash to invest at a moment’s notice, but just because you don’t have a savings account doesn’t mean you should let your business die. If you finance the purchase, and you see the immediate increase in productivity such that it covers the monthly payment, you will continue to grow as your portfolio increases, and you’ll find that income margin improving with your reputation.
Making a sizable investment in equipment for shared storage and creative team environments can be scary, which is why I like math. Numbers are just numbers—they don’t know how to be scary, or kind, or anything like that, they just are what they are. If Expected Value is less than Known Cost, don’t. If Expected Value is more than Known Cost, do it. If you see the value, the math adds up, but you don’t know if you want to invest that much because it’s a big, scary number, the number isn’t scary, you’re just scared.
Look at the big picture, not just this month’s bank statement. Sometimes it’s scarier not to make the purchase. While you might make back the investment in the first year if you managed to secure two new accounts as a direct result of the improved system, you might not be around next year if you try to work with unprofessional equipment that gets in the way of being a professional in your field. If the math works, you will succeed, and it will be because of the needed, not just wanted, upgrade.