According to an Inc. magazine article, research shows that small-business owners think it's smarter to spend money on new technology than on new employees. Why is that? Small-business owners think they'll receive a greater ROI (i.e., more bang for the buck) by investing in new mobile technology, enterprise software, and other IT solutions. This technology increases a business's connection to its customers and helps its employees be more productive.
Economists have long worried that, as this research confirms, the modern tech economy is replacing workers with technology. While there's some truth to that concern, it's only part of the story. The other part has to do with you, the technology business owner.
As more and more businesses need IT solutions and upgrades, IT contractors are set to see growth in their industry. In fact, we recently profiled how C-level executives have been looking to invest in more technology professionals in our article "84% of CIOs Probably Want to Hire You."
Let's take a look at what this new research and growing need for tech means for an IT business like yours.
4 Takeaways from New Research on Small Business Tech
The survey mentioned in Inc. only studied small businesses, which makes the results especially surprising. Even a few years ago, small businesses embraced much less technology than their larger counterparts. Now that gap is narrowing.
There are four things you should take away here:
- Small businesses are realizing that they need to keep pace with new technology. Indeed, research from exacttarget.com, a digital marketing company, reveals that consumers judge businesses based on their mobile strategies. It turns out that having a strong, cross-platform mobile presence means that consumers will generally think more highly of a business, perceiving it to be more "with it" and capable.
- Most small-business owners are anxious that they have outdated technology. With more than two-thirds of small businesses thinking that they should invest in technology rather than new employees, it’s likely your clients know they have some software and hardware that’s out of date and holding them back.
- Tech consultants need to position themselves to take advantage of these opportunities. If small businesses want to invest in new tech, you need to make sure your business is in a position to reap the rewards. That means reviewing the services you already offer and looking to see if you can (or should) expand to pick up new business.
- Keep in contact with old clients. One of the easiest ways to get more business is to offer new or expanded services to old clients. The study suggests that the majority of small businesses are aware that they need upgrades, which means your old clients might need more work from you in the future. Some IT consultants send courtesy emails to inform clients about new offerings they have. Now might be a good time to use a similar tactic.
IT Liabilities You Need to Know
In insurance lingo, a liability is the thing you're sued for. It's your responsibility to fulfill an obligation. When you don't do that or you make a mistake, then you can be sued.
IT companies face numerous liabilities, so let's break them down into three simple categories:
- Client liabilities. One of the biggest challenges in IT consulting is the knowledge gap that exists between you – the IT expert – and the client. From time to time, remind yourself that you need to go over basic data security issues with your clients, teaching them a 101 course in how to use their computers securely. For more on what to tell your clients, see "The Million-Dollar Client Conversation."
- Third-party liabilities. You can't do everything yourself. IT consultants often "outsource" some of their projects to third-party companies. For instance, you might use a third-party payment processing service on a client's mobile app. These third-party vendors come with their own risks. To learn more about vender risk, read our article "Help Your Clients Understand the Risk from Third-Party Contractors."
- Professional liabilities. As an IT professional, you can be sued over mishaps in your work. If you recommend software that ends up being incompatible with the client's other software, you can be sued. Additionally, if any hardware or software you recommend is involved in a data breach, you might be served with a lawsuit.
These aren't your only liabilities, but lawsuits from each of these liabilities can be covered under an Errors and Omissions Insurance policy. To learn even more, check out our blog posts about E & O Insurance.