Practical considerations to determine if your business needs new software and whether or not it should operate from the cloud?
In today’s fast-paced business world, pool and spa professionals are always looking for the best way to stay ahead of the competition, especially against big box retailers. Business software is central to the success of any pool and spa business. The right business software can provide the tools and information needed to remain profitable and retain market share.
Manager and owners need to take the time to put some numbers on paper and ask themselves: Does the cost of your current business software/manual system exceed the price of purchasing new software? Are you simply not satisfied with your current software solution? Are you uncertain what it costs to have an in-house server versus hosting on the cloud?
If the answer to any of these questions is “yes” then it’s time to delve deeper and define the cost of your current systems to determine if there is a better option available.
The Cost of Doing Nothing
Start by asking the tough question: What is the cost of doing nothing? In other words, what is it costing your business to operate with manual systems or software that is cumbersome or inefficient?
Most pool and spa businesses generate more than 80% of their revenue in less than six months of the year. In our industry, time is truly money. You don’t want to spend your time on paperwork or manual software entries. Factor in the time it takes your staff to accomplish these tasks by hand rather than using a computerized system with a barcode scanner and integrated credit card reader. Because you pay your employees by the hour, the real question becomes: What is the opportunity cost of having them spend time hand-writing invoices or doing manual inventory tracking?
Rather than having an employee spend 30 minutes of every hour with manual systems, they could spend 30 minutes helping customers, selling more products and building customer loyalty. Rather than paying them to do manual tasks, pay them to generate revenue. Time-consuming tasks during the busy summer season invariably lead to lost sales opportunities.
Manual or semi-manual systems also make it difficult to react quickly to market opportunities with up-to-the-minute information, making it hard for managers to make smart business decisions like being able to reduce inventory or locate a part on a service truck to quickly sell to a customer.
Selecting a Software Solution
Implementing new software may help reduce or eliminate stressors that are currently inhibiting business growth.
For example, many pool and spa professionals realize that their service departments offer many untapped revenue streams. Software for service departments is a good place to start evaluating new software options. Some software solutions allow techs to take payments in the field, look up their schedule for the day, review job notes, look at the customer’s equipment profile, send customers before and after pictures with the electronic door hanger after the job was completed and more.
There are also many app products on the market that meet the needs of service techs working in the field, from entry-level GPS tracking apps that monitor service vehicles mileage, speed and location to water-testing apps that test pool/spa water and instruct service techs on what chemicals to add to the water.
Ensuring a Quick Return on Software Investment
Before researching solutions, business owners and managers should consider what they currently have and what they would like a new system to be able to do. Implementing software can improve efficiency, accuracy and save company expenses in the long run. In today’s world there are now software options that manage all business processes from sales to purchasing with the right software management solution. Look for an option that can collect your data in one system and provide you accessibility anywhere, anytime.
A good way to start evaluating software options is to ask other pool and spa businesses about their software providers. Trade shows, distributor open houses and buying group meetings provide excellent opportunities to investigate software solutions used by similar pool and spa businesses. Once you have identified a few software options, make a list of must-have features and ensure the new software solution can accommodate your needs. Be sure to inquire about the cost of training and support services to get the software up and running and for its continued maintenance.
Rather than focusing on the software’s price, bring a list of all the areas where you could generate more revenue if your employees had 20 additional hours a week to follow up on sales leads, make additional service calls or tend to customers in the store during peak hours in the season. Then ask the software provider to tell you if their solution will help you take advantage of the revenue opportunities you are currently missing.
Imagine the impact if, six months out of the year, your staff up-sold items with a $5 profit to 15 customers a day; you would increase your profit by more than $13,000 a year.
If you are service company, several software providers offer route optimization features that allow you to lower fuel usage and reduce maintenance costs. Many pool and spa business owners have even found that by optimizing their service routes they were able to do more jobs in a day, thus generating more business.
For the people in the office, a new software solution can eliminate printing, stuffing and stamping invoices. Now invoices can be emailed in bulk or credit cards can be kept on file for batch processing. Create a simple ‘back of the envelope’ equation to help you determine the break-even point on purchasing new business software. If you are invoicing 500 customers a month you can save $3,000 on postage alone for the year. Add in the labor to stuff and stamp the envelopes, the time to apply payments as they come in and the cost of the envelopes.
By quantifying the additional revenue that a more efficient software will provide, you will probably experience less sticker shock.
Should You Move to the Cloud?
Another important business decision is whether to host your business software operations in-house or in the cloud. The choice you make will depend on your goals and your IT resources. There are three very important factors to consider:
Expense In-house servers can require a significant upfront investment in hardware and IT services to both install and implement the hardware. A dedicated server is a physical computer that is purchased and installed at your location just for your company’s use. Like buying and owning a house, the initial cost of a physical server is higher but once you own it, it’s yours. You’re free to expand, modify and manage it as you please. The downside is that you’re also responsible for your own maintenance. In addition, accessing your data from outside your network must be done through remote software.
A cloud solution, on the other hand, does not require any upfront, onsite hardware expenses, but instead requires business owners to pay an ongoing monthly fee to host their data.
It is important to understand that a cloud server is a shared virtual network environment that is managed by a hosting provider. It’s like living in an apartment complex. You don’t have the keys to each other’s data but you’re sharing a building with many different companies. Your landlord is the hosting provider, and you’ll be placed under contract to lease the space that houses your data.
The advantages of a cloud-based server are many: You can access your data from anywhere through a smart device; you’re not responsible for updates or IT support; the initial costs are less expensive than purchasing a physical server and, if anything bad happens to your store, your data will be safe. The downside is that you have restricted control over your data space, you must share a server with many other people and data security is not under your control.
Control Having an in-house server gives you physical control to access your data, control your backups and there is no third party that has access to your company’s information. The cloud company that hosts your services essentially holds all the cards for accessing the data. However, on the upside, a cloud solution offers unlimited storage without having to upgrade hardware.
Access Using a cloud server requires a constant and stable internet connection. If the internet is down, then you do not have access to your data. If you have an in-house server, internet is usually not required.
Processing power should also be considered. To continue with the home analogy, in your own home, you have a water heater that is yours and yours alone. Hot water (or processing power) is readily available to you and quickly replenished. With a virtual server, your water heater is shared among all of the residents of that server. If one company needs more hot water on a particular day, your available resources are diminished and your service will be lukewarm at best. One option to offset this sharing system is to pay an additional cost for priority on such resources.
Regardless of whether you’re using a traditional server or a virtual one, both will need to have backups in place. Hardware can fail no matter how you choose to host your files.
If you know you are leaving money on the table with manual or outdated information systems, then it’s time for you to try to quantify the amount of revenue opportunities you are missing. Assessing the true costs of your current business software system is the best way to determine if it’s time to get new business software and the best place to host the powerful information that will keep your pool and spa business profitable in today’s competitive market.