Quickly cut the costs of your IT while preparing to sell your business.

To maximise your business valuation there are two main objectives – to cut costs and increase profits. Achieving these two objectives will enable your business to be presented in the best light. One limitation however is time. Business owners wanting to sell need to make quality decisions that will impact the figures sooner rather than later.

Creating an IT cost reduction plan can deliver results within days.

In my business, however, I was very close minded about making changes to my IT structure. I had a full time IT manager, a couple servers in a closet, around 40 personal computers (some old and some new) and a variety of software packages including Microsoft Office, Sage ACT!, Sage Accounts, etc. (some legal and some not-so-legal). Every week there was some sort of hardware failure or connectivity issue. And as we grew the cost of upgrading software started to cause nightmares not to mention a financial burden. My IT guy was always busy with hardware issues or software compatibility problems – he definitely had job security.

Even with all these problems…I was afraid of moving anything off-site and had no idea what the ‘cloud’ was. One day I realised that there must be a better way – I did some research, decided on a plan and made some radical cost cutting changes. As a result I also eradicated most, if not all, of my IT issues.

There’s an IT revolution currently going on, but you won’t hear about it from your IT staff because it will make them redundant!

Listed below are a variety of options to consider that will enable you to cut IT costs (and seriously reduce your hassle). Furthermore, keep in mind that when preparing to sell your business, you want to cut costs and increase profits. This is a great way to take a chunk out of your expense report.

1. Rent your software rather than buy it. Nowadays quite a few software offerings are available on the Internet rather than being hosted on internal company servers. For example, Salesforce (manage your sales pipeline and process) and Basecamp (helps manage projects) are two popular online software offerings. In the future, all software will be out there in the cloud rather than hosted on site but we’re still a few years from that happening. The main issue is that business owners just don’t realise the available options and access to a permanent, good Internet connection needs to be more pervasive.The concern with online software is connection issues – what happens if your Internet connection goes down? What do you do then? Fortunately, issues like that have been addressed and cloud software allow users to have a local copy of the software and your data in addition to using the online version. And if you’re really paranoid (like I was), you could have two types of Internet connections – one coming into the building and a backup mobile/satellite option.Even Microsoft Office has an online offering. For as low as £3.90/user/month you can rent the most updated version of MS Office (Excel, Word, PowerPoint) in addition to getting Email, collaboration software, web conferencing and even a website. An alternative to Microsoft is Google Apps which have a similar set of applications available. The great thing about online software is that everyone in the business always has the most updated version so there’s no need for licenses or upgrade costs. Furthermore, you don’t have to fiddle around with installations or conflicts because one computer has a different version from another. Also, your PCs and mobile/tablet devices can access the software from any location (if that’s something you desire). And yes…there’s one more benefit – you no longer need to worry about anti-virus software as that’s included too.When preparing to sell your business, you’ll need legal versions of all your software. Furthermore, it’s important to have the most-up-to-date versions of everything running. With that in mind, would it be cost effective to move online with most, if not all, of your software needs?
2. Move your file storage/backups offsite. The more you store on your local file server, the more storage capacity you will have to add to your backup process and the longer it will take to backup. Due to the threat of fires, risk of accidental deletes, malicious employees or hardware malfunctions the cost of having a melt-down could be massive. Have you ever thought about what you’d do if you lost all your data? These things are often head-in-the-sand issues. You just don’t want to think about them.Considering your intentions now is a great time to move your files and storage to the ‘cloud.’ The cloud is simply a term that indicates space on the Internet that is housed outside of your business – hopefully in area that is backed-up, bomb proof, fire proof and set up to minimise hardware faults. Also – cloud based offerings can provide very quick fixes when things do go wrong.When preparing to sell your business you’ll have to clean up your file structure and make sure that everything is in its perfect place. While doing the clean-up, why not include moving the information off-site too?Regarding cost savings – this is one of those things that is more preventative than anything else. My IT person wasn’t fiddling with the servers often, however our backup system consisted of a nominated person taking a tape home every night. If that person failed to take the tape home, we’d lose at least a days’ worth of work. Not only that, we never actually tested that the data restore process worked!! For my business, that was too risky. We eventually moved all our storage off-site knowing that there are far better people to look after our data assets!
3. Move all your hardware and software externally. This takes quite a lot of balls to even consider – especially if you’re a traditional brick and mortar business. When I first contemplated moving everything outside of the business walls I felt very uncomfortable. I always liked to see everything and control everything. Well – I took baby steps and in the end realised that a complete outsource of everything IT was heaven. After moving our servers and software to the cloud I no longer needed a £40/k IT Manager anymore. Furthermore, I never had to worry about software or hardware upgrades other than the internal hardware. Internally, I simply had a few spare computers sitting off to the side to swap out if anything every happened.

This IT revolution is similar to the outsourced electricity revolution. Back in the day, companies had their own power source whether it was their own water wheel or mini electricity plant. No business owner would consider outsourcing their electricity needs! The same is happening to the IT industry. Your business is unique because of your products or services not because of your IT infrastructure (unless you’re an IT, data centre or hosted software company!). Stating that, if it’s not part of your core and you can safely outsource it for a lower cost, what’s stopping you?

Throughout the past several years I’ve worked with a couple excellent ‘cloud’ companies who hand-hold business owners through the whole outsourcing process. If you’re interested in outsourcing some or all of your IT, send me an email letting me know your broad requirements and I’ll give you the details of my recommendations.  Email me at: Kim@BusinessWand.com

Kim Brown, Co-Founder of Business Wand, helps business owners navigate their way through the start to finish process of selling a business.  Her specialty is to help owners cut costs and increase profits prior to sale. To understand how you can sell your business quickly for the highest sales price, purchase the book, “How To Sell A Business: The #1 guide to maximising your company value and achieving a quick business sale”