Is your software keeping pace with your SMB’s growth?
As your business expands, you may be realizing the limits of the tools and platforms that got you started.
You might be outgrowing a single application, or dealing with systems that don’t work well together, or finding that your entire tech setup needs an overhaul.
And when that’s the case, even seemingly simple business tasks take longer than they should.
The right tech stack, on the other hand, can help your SMB run much more efficiently.
In this guide, you’ll learn how to audit your current tech stack, identify opportunities for improvement, calculate the potential ROI of an upgrade, and discover ways to finance an upgrade without putting too much pressure on your working capital.
What Is an SMB Tech Stack?
Put simply, your “tech stack” is the collection of software solutions and digital tools that your SMB uses to manage operations. These may include:
- Point-of-sale (POS) systems to process transactions and tracking sales.
- CRM platforms for organizing customer details, tracking new leads, and managing follow-ups.
- Inventory management tools for monitoring product movement and stock levels.
- Accounting software to track income, expenses, and manage invoices.
- E-commerce platforms for managing your online storefront, orders, and payments.
- Workforce management software to handle payroll as well as employee hours and scheduling.
- Project management tools so teams can coordinate tasks, share information, and manage deadlines
Each tool has its strengths and specialties. However, problems can arise if systems operate in isolation and information doesn’t flow automatically between them.
More than that, an outdated tech stack can also be an enormous productivity killer: SMBs spend an average of 25 hours per week on manual data entry and data reconciliation across their software tools.
So, what to do? If you’re like many SMB owners, you already know that manual workarounds can only do so much as your business scales.
The first step shouldn’t be buying new software. Instead, start with an audit.
How to Audit Your SMB Tech Stack
First, take stock of the tools you already have.
An audit can help you identify what’s currently working, where problems are surfacing, as well as what may need to change as your SMB scales.
1. Take a Software Inventory
List every software tool your SMB uses regularly, including those that individual employees or departments use. For each product, record the following:
- Purpose: What does it help your SMB do?
- Functions and features: What tasks can it perform and which features does your team use regularly?
- Users: Which employees or departments rely on it?
- Data: What kind of information goes into the system and what information does it produce?
- Cost: What do you pay to use it, and how often (e.g., monthly subscription, one-time fee, or something else)?
Gathering this information gives you a clear view of your operational technology and sets a reliable baseline for the rest of your audit.
2. Evaluate Each Tool
Next, assess whether your tools are meeting your SMB’s current needs, and whether they can keep up as your operations expand. Consider these questions for each tool:
- Capacity: Can the software handle your current transaction volumes, customer numbers, and operational demands, including during busy periods?
- Usability: Is it easy for employees to use, including new hires who may need access as your team grows?
- Functionality: Does it provide the features your business needs now? How about a few months from now, or 1-3+ years into the future?
- Scalability: Can the software accommodate your SMB’s expected growth in customers, transactions, or employees without creating significant performance issues or costly workarounds?
- Cost: Does the software provide good value? How might its fees change as you add users, features, or capacity?
Rating every tool across these points highlights where your stack is serving you well and pinpoints hidden bottlenecks before they limit your growth.
3. Identify What’s Not Working Across Your Tech Stack
Even if individual platforms work well on their own, operational bottlenecks can emerge when they don’t work well together.
In this step of your audit, look at your tech stack as a whole, how all your tools interact, and where gaps or inefficiencies are creating unnecessary work. Consider the following:
- Integration: Do your tools share information automatically, or do employees have to input or transfer data manually?
- Redundancy: Are multiple tools performing overlapping functions, leading to additional costs or complexities?
- Data consistency: Do customer, sales, and inventory records stay consistent across systems, or do discrepancies require constant manual checking and correcting?
- Workflow efficiency: Are employees spending too much time reconciling information, correcting errors, or assembling reports manually? Could these issues worsen over time?
- Information access: Can employees easily find accurate, up-to-date information they need to make decisions and manage increasing workloads?
Ultimately, your audit should give you a clearer picture of where your tech stack may be holding your SMB back.
Know When to Upgrade—and What to Look For
Not every small business tech stack problem requires new software. Sometimes, all it takes is investing in better training, a few configuration changes, or getting rid of a redundant tool.
But if the same problems keep costing your SMB significant time, money or opportunities, it may be time to upgrade.
If, after your audit, you decide an upgrade is a smart business move, focus on tools that solve your current problems without creating new ones as your operations expand.
Here are five things to look for in all software.
Integration
Choose software that works with the tools you already use. Automatic data sharing and business process automation can reduce duplicate entry and help keep records accurate.
The Right Features for Your SMB
Avoid paying for extra features your team won’t use. Rather, seek out tools with features that address your actual needs, while ensuring the software can support the tasks you’ll need to handle as your SMB grows.
Visibility
Invest in tools that make it easy to see important business information—sales, inventory, expenses, and more—all in one place. This will help you easily spot problems and make decisions without having to pull data from multiple systems.
Ease of Use
Software should make work easier, not add another layer of complexity. Look for tools that offer intuitive interfaces and accessible support so you and your employees can learn the system without extensive training.
Room to Grow
Finally, consider how the software will handle your business growth—whether that means managing more customers, orders, employees, locations, or something else.
Calculate the ROI of a Tech Upgrade
Now, we get down to the number-crunching.
As you research your software options, compare your potential investment with the value that each tool might deliver. This will help you determine which solution offers the best return, and whether the benefits justify the cost as your SMB grows.
You don’t need perfect data to calculate your ROI. Even reasonable estimates can help guide your decision.
1. Cost of Your Current Manual Process
First, estimate how much time your SMB spends every week on data entry, reconciling records, correcting mistakes, and preparing reports.
Then, calculate the annual cost using this basic formula:
Annual cost of manual work = Weekly hours × Hourly cost or value of time × 52
As an example, let’s say you have a team of five employees, each spending two hours every week manually entering data, cross-referencing records, and fixing errors. If their average hourly cost to your business is $25, that totals $13,000 per year in labor costs (5 employees x 2 hours x $25 per hour x 52 weeks).
That’s time your team could otherwise be spending serving customers or handling other important business tasks.
2. Cost of the Upgrade
Researching software also requires looking beyond the base price. Your total investment may include any or all of these additional costs:
- Implementation and set-up fees, as well as configuration and customization with your business processes.
- Integration services, including transferring existing data into the new system and validating its accuracy.
- Any new hardware (computers, tablets, scanners, etc.) needed to support your new software purchase.
- Employee training costs.
- Ongoing subscriptions and maintenance fees.
Add up these costs over the same timeframe for each software option you’re considering.
For example, Software A might cost $2,000 upfront plus $100 per month; while Software B costs $500 upfront plus $200 per month. Comparing their total costs over the first year (3,200 vs. $2,900) helps you see which option is more affordable overall, including both the initial investment and extra fees.
3. Potential Return on Investment (ROI)
Finally, consider how much the new tool could save your SMB money—or help it earn more.
Potential benefits may include less time spent on manual data entry and other repetitive tasks, less money spent correcting billing mistakes, lower storage costs due to better-managed inventory, or increased sales as a result of faster order processing.
Once you’ve estimated a dollar amount for each benefit, add them up and compare them to the total costs of the upgrade using this formula:
ROI = (Total benefits − Total upgrade costs) ÷ Total upgrade costs × 100
Let’s say you’ve determined that an upgrade will cost you $12,000 in the first year, including additional fees. You’ve also predicted that it will deliver $16,800 in measurable financial benefits within that same timeframe. Your estimated ROI is 40%, with the upgrade hopefully generating $4,800 more in financial benefits than it costs.
Fund Your Upgrade Without Straining Cash Flow
Even when a tech stack upgrade makes financial sense, using too much available cash to pay for it can leave less money aside for all your other important routine expenses.
That’s where working capital comes in, helping your SMB cover short-term financial obligations and invest in growth while keeping operations running smoothly.
The challenge? Banks can take weeks, even months, to approve and release funds, and that’s if you even meet their rigid requirements. If you need funding quickly, that delay could mean missing the opportunity.
Enter alternative financing, offering flexible working capital solutions designed especially for small businesses, with funding generally provided within 24 hours of applying.
Through Bitty, SMB owners can access alternative funding products including:
- Revenue-based financing (RBF), which provides an upfront lump sum that is repaid through a percentage of future revenues, with required payments adjusting with sales.
- Fixed-fee business loans, ensuring SMB owners know from the get-go what the total borrowing cost and repayment structure will be.
Ultimately, both options give SMBs a way to move forward with a worthwhile tech upgrade, without putting unnecessary pressure on your business’ cash flow.
Modernize Your SMB Tech Stack With Flexible Funding From Bitty
As your SMB expands, your technology needs will inevitably change.
Understandably, making upgrades to your SMB tech stack can feel overwhelming. The risk is waiting too long to make improvements, which can lead to unnecessary costs and get in the way of your scaling efforts.
The good news is that you don’t need to upgrade everything at once. Start by focusing on the changes that will make the biggest difference to your SMB.
Meanwhile, Bitty is here to provide you the fast and flexible funding you need to invest in your business’ sustainable growth.
Ready to make a smart investment in your SMB’s future? Contact Bitty today to discover funding options that work for your business.
