This is a nuts and bolts post about how we are funding our automation. We are small business owners. We both own AND operate our business. Which means our profits come from both paying ourselves to operate it and also paying ourselves with the profit we made. I’ve talked to a lot of store owners lately and we’re not much different than most. If there’s money in the checking account, then we get paid. So it isn’t that hard to look at technology as added expense. If I want it, I have to pay myself less. Naturally, we fought the investment as much as the next guy. Here are a few things to consider.

How much to invest before you start seeing savings?

The rule of thumb I would follow here is 1 year before you begin to see a return. Whatever technology you choose, it will take about a year to really iron out the processes and realize any savings. In fact, the first few months, you won’t only have spent money, but you’ll also feel like you’ve added time costs as well. In fact,  its a common business term known as ‘the change curve’. Which basically states there’s a process where you lose productivity and time when you make changes, but end up better on the other side. The length of time we’ve noticed correlates to how critical the process was that we changed.

You need to count on your technology being an ADDED expense for the first year. Minimum 6 months.

How much do other people spend on technology?

Well… depends. I know some owners who live and breath in Excel and Quickbooks. Both one time expenses. But they usually spend every night or one day a week in those tools catching up. I know others who were able to configure operational tools such that the entire process was automated. For a small business, that’s probably going to cost around $150 to $300 a month, and probably includes up to $3000 in one-time fees. I do know that for convenience stores who want pay at the pump, your one time cost for your point of sale is going to be significantly higher, as much as $20k for your point of sale to read that purchase.

Best way to pay for that?

If you want to calculate how much money your new systems will save you in three years, you can add everything up and present a business case to your local banker. You might even be able to just take some money in a cash flow loan. Or, you can do what we are doing. Earning a little less each month for year and spending a little more time on our business each  month for a year, but walking away with a debt free purchase and more time on our hands when we’re done.