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Avoiding Tech Debt in Your Small Business


Avoiding upgrading to the paid version of your productivity software, still using Excel to manage millions of dollars rather than buying a subscription, or avoiding hiring a programmer to write a script to automate repetitive tasks? You have tech debt. Tech debt is the cost experienced when a business does not upgrade technology of any kind, resulting in financial or productivity deficiencies. When businesses try to get by on technology that is not sophisticated enough for their needs, they experience tech debt.


While tech debt is typically discussed in terms of large businesses or technical experts (tech debt can also be called “code debt,” which typically refers to writing code for a quick fix rather than writing code that will endure through future process changes), it also impacts small businesses and entrepreneurs. In some ways, small businesses can be even more susceptible to tech debt as their owners wear multiple hats and juggle priorities to make their businesses run. Without someone with the free time to consider long-term process improvement, recognizing potential cases of tech debt in advance becomes difficult, if not impossible.


Tech debt usually arises from retaining outdated systems or an unwillingness to update processes and the tools used to streamline these processes. In small businesses, inefficient processes may stay in place not due to unwillingness but just due to a lack of time or mental space to consider improvement. While not stated in these words, a considerable part of my day job as a management consultant is recognizing tech debt and suggesting and implementing technology solutions to reduce or eliminate this tech debt.


Still shaky on what tech debt looks like in your small business? Here is a simple example from our first few months running Phippen Tax & Financial Services: We were going on vacation in February and needed to send out our weekly newsletter while we would not have Internet access, so we upgraded our MailChimp account. The plan was to do so temporarily, but I realized that putting multiple email campaigns together and scheduling them all for future dates in one workday saved me time overall. Rather than only upgrade when we are on vacation on a Tuesday, we now pay for MailChimp so future campaigns can be scheduled. It saves us from stress and frees up our time and mental energy to the daily tasks at hand.



What Tech Debt Costs Entrepreneurs and Small Business Owners


Tech debt can cost small business owners and entrepreneurs money, time, and peace of mind. If you are a newer business owner or entrepreneur, chances are at least two of those are scarce resources.


Up front, we often fall into the trap of tech debt to save money. The cheapest website platform, productivity software, or accounting process sounds great to us. Over time, we recognize that we need more website capabilities, but we find a separate software to provide the capability for $10 less a month than the premium website upgrade. Winning! Then, we buy another service and end up only $1 less than that upgrade. Suddenly, we are considering the service that will put us over the upgrade price. Upgrading would mean changing those two previous processes, and that sounds exhausting. If time is also lacking, the additional service may be purchased, resulting in a higher price tag than the premium website upgrade.


From the outset, you probably know that your goal is to grow your business. With that in mind, you either need to purchase that premium website upgrade or define a point (for example, the first time you need an additional capability) when you will upgrade to prevent future inefficiencies. This helps your business grow quickly without friction caused by tech debt.


This is the same consideration as when you hire your accountant or attorney: If you work with Patrick, you do not work with him because he is the least expensive person out there. He is not. He costs less than someone at a Big Four accounting firm or a white-shoe law firm because he does not have the overhead costs of an office building with views of the Capitol. However, you can find less expensive accountants and lawyers. You are unlikely to find a less expensive one who does both, and you definitely will not find one for his price who will save you as much money on your taxes as he will. It is a tradeoff. Would you rather pay someone $100 and owe $2,000 in taxes or pay someone $500 and owe $500 in taxes? If you want to pay $1,000 instead of $2,100, you hire Patrick.


Particularly if you are a small business owner with intricate processes, revisit them regularly. If you are not someone interested in technological advances or process improvement, it may even be worth hiring someone with a business management or consulting background to assess how your business processes could be improved to actually save you money. (We can help!)



Tech Debt is Costing You Time and Peace of Mind


When tech debt costs you money, it is more apparent. When it costs you time and peace of mind, that can be more difficult to recognize. If this is true for you, start be thinking about time in terms of money: If you charge clients $100 an hour for a service you offer and working with antiquated technology results in you spending an extra two hours a week on on a simple task, you are losing $200 a week or $10,400 a year in tech debt. Ten grand because you will not upgrade your accounting software or productivity app.


Even if the time discrepancy is not so great, upgrading for peace of mind is also valuable. While not everyone would include this as a variable in tech debt, I consider it a part of the equation. If we do not free our headspace from the trivial details, we do not have the right mentality to practice creative thinking and solve the important problems associated with a small business. It is a shame to waste our mental energy on menial tasks rather than use it towards our next great idea. If tech debt creates creativity debt, that may be even worse than financial debt.



Avoiding Tech Debt


The easiest way to avoid tech debt is to document your processes and all technical tools used in your business initially. If you have not done this before, set some time aside to do so. When documenting, list the tool as well as what it facilitates. For example, Quicken (or Quickbooks if you are a small business owner) may facilitate accounting and tax preparation while Asana may facilitate task tracking on projects and prioritizing meetings.


Recording how you use different tools can also help you recognize if they are not the best tools for you to use. Sometimes we start using a technical tool for a purpose but expand to use other capabilities that would actually be better addressed by a different platform. Alternatively, maybe we use two tools to cover the tasks that can now be performed by one tool. After listing how you use certain tools, research similar competing tools to see if another one is better for you!


If you want to dive deeper into the avoiding-tech-debt world, you can even subscribe to newsletters and podcasts related to the kinds of software or apps that are pertinent to your business to stay informed about new marketplace additions. Tools like productivity apps are always changing, updating, and adding capabilities. Staying attuned to adjustments in the tools you use will keep you ahead of tech debt.


Finally, be willing to spend some money, even if it is just to make your life easier. Sure, you would rather have that extra $20 a month in year one, but if that $20 allows you to grow twice as quickly in year two, it is worth it. Prepare for the growth before it happens.



Recognizing Tech Debt and Making Improvements


As your business grows, your processes grow too. A process that once involved simple tools may need a more sophisticated tool to facilitate a lengthier or changing process. These changes are natural parts of growing a small business, and they deserve the proper technological solution.


Entrepreneurs and small business owners are often short on flexible time to explore creative solutions, making it more difficult to address tech debt. If this describes you, spending so much time making sure your business runs that you do not have time to consider how it can run better, tracking potential tech debt is even more important. While you cannot expect to address tech debt immediately, block off a few hours each month or quarter to reflect on any tech debt arising in your business operations. In your day-to-day business, commit to noting any process improvement ideas that may utilize technology. A simple note to capture your thoughts on your phone or a piece of paper is sufficient. Revisit these notes when it is time to actually reflect on tech debt and potential remedial actions.


Implementing new technology to improve processes does not come without growing pains. It may take time to learn how to set up and use a new software, or you may have employees who require training on a new app. However, this initial time should ultimately save you time, money, and stress in the long run. By operating your business with the appropriate technological assistance, you will facilitate growth in your business and save yourself the daily stress of tech debt.


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