How IT Increases Business Value


How IT Increases Busines Value

5 Tips on How IT Increases Business Value

Is it time?

Have you been looking forward to this day since you started your business? Are you at a crossroads that has you contemplating why you started your business in the first place? Or are you simply future planning your eventual exit strategy? Bottom line, when is the right time to sell your business and what can you do to optimize the sale price? If you are asking these questions, congratulations! You’re thinking about the right things even if you’re not planning to sell your business right now. And as you plan, learning how IT increases your business value is an important part of your strategy. The truth is, every business owner should be looking at their IT and using it to improve business value, regardless of when they might be looking to sell.

Did you know?

The average spend on IT for a fiscally healthy company is 2% of gross revenue. Let that sink in. For every $100 earned, a minimum of $2 should be allocated to IT. This means if you’re earning $10 million in revenue, there should be a $200k annual spend on IT. Yes, that is a lot, and that probably has you wondering why and how!?!

Why IT matters!

When you dive into the nuts and bolts that hold a business together, the importance of IT immediately begins to make more sense. Think about it. In the 21st century, almost every facet of your business is touched in some way by a digital footprint: your website, remote workers, on-line orders, email communications, mobile apps, internet usage, and mobile phones to name a few. These are just the tip of the iceberg. Systems and processes that aren’t optimized digitally should be reviewed for potential inefficiencies. This is important because identifying and plugging these gaps can increase productivity.

This leads us to some important IT Tips that you can use to improve your business’ valuation. Your goal is to make as much as you can during the sale of your business. To do this, you need to think about it as if you’re the buyer. Entrepreneurs do not want to buy a business that uses antiquated processes. They avoid businesses that have difficult operations and especially those that are not coordinated across departments or limited to operations understood by a handful of employees. A valuable purchase has every procedure and system dialed in. Making the business reliable, repeatable, and easy to operate. You can improve your business value. Think about IT!

Here are 5 important tips how IT increases business value

Tip 1 – Digital Processes are More Valuable Than Pen and Paper

All of your workflows should be digital, structured and organized. If you do it right, your important documents and business records are stored electronically in a way that lets them be easily located and accessed, while also being securely backed up. Shifting the “file cabinet” from paper to digital makes it much easier to quickly find “that agreement” from 3 years ago. When paper documents are misfiled, damaged, or destroyed, they may be gone forever. On the other hand, digital records are readily searchable, protected from accidental damage, and secured through system backups.

We run into this all the time where small business owners have been reusing the same processes for 30 plus years. While “proven process” is a great concept, it is a bad idea not to move it digital. Critical documents that go missing will make for a terrible selling experience. 

Tip 2 – Organize and Document Every Process and Procedure

Standard Operating Procedures (SOPs) should address every function that is required to run your organization. Identify each job role and the various checklist of tasks that must occur daily, weekly, or monthly. As you consider workflows, review department communications and how they interact with each other. Here are some areas of focus:

  • Inter-department dependencies
  • Data input and information transfer
  • Identify system bottlenecks
  • Bottleneck remediation plan
  • Documented SOPs for every task

SOPs that are unstructured and disorganized can actually become its own bottleneck. Procedure changes must be updated manually when information sits in a physical binder. Likewise, task checklist should never remain in an employee’s head. SOPs are at risk of loss if the binder disappears or the employee leaves the company.

Additionally, workflows and checklists that are not formalized are open to interpretation. This can result in “must do” tasks falling by the wayside as “should do” tasks. There is also less accountability for task performance. When SOPs are not clearly documented and communicated, it opens the potential for confusion and missed deadlines, which can hurt the business financially. This is why organizing and documenting every process and procedure is so valuable for every business.

Tip 3 – Update Your IT Infrastructure

No one wants to buy a lemon. However, it is important to understand that PCs have a shelf life of 3-5 years. And the life cycle for other IT equipment like networking and servers is 5-7 years. When businesses keep older devices in use past this time, the equipment begins to slow down and encounter errors and breakdowns. We see this all the time with older IT equipment: apps won’t load, payroll software is being glitchy, attachments won’t open… The list goes on. Although equipment replacement may be a budget concern, it is just as important to remember that devices that aren’t working well create lost productivity. Losses in production caused by out-of-date IT equipment is a hidden cost to the business.

Business owners have options to help manage the cost of updating the IT infrastructure. Rather than buying new equipment, consider using a Device-as-a-Service (DaaS) program or equipment lease. These programs provide a way to upgrade and refresh your company computers, monitors and IT infrastructure. This keeps everything under warranty. Additionally, the spend becomes an operational expense rather than an occasional capital expense that depreciates.

Tip 4 – Streamline and Automate Your Processes

This is one of the most valuable tips on how IT increases business value that should not be overlooked. Experienced business owners understand that it is processes that make or break a company. An entrepreneur knows that a more valuable business has better workflows and streamlined processes. Moreover, a prospecting buyer of your business will be most interested to see the systems that are automated. Automated processes are industry game changers and can greatly improve productivity and bottom line. This means, streamlining your business workflows improves standard processes that increase their efficiencies by implementing better systems. All of which results in reducing the time and effort it takes to complete tasks or eliminating the step altogether.

Consider the following scenario for an SMB process.

STANDARD PROCESS (worked for 30+ years why change it?)
  • Step 1- Customer has to fill out multiple forms, sometimes with duplicate information (address, email, etc.)
  • Step 2- Staff takes filled out forms and enters them manually into a system (database 1)
  • Step 3- Staff prints out specific information from system to be transferred to different department
  • Step 4- Staff hands printed forms to be transferred directly to department
  • Step 5- Department staff inputs into a different system (database 2)
    (why does this process make me think of the DMV?)
  • Step 1- Customer fills out form with only necessary information (no duplicate info)
  • Step 2- Staff receive forms and inputs into the system (database 1)
  • Step 3- Staff emails forms to department
  • Step 4- Department staff input into the department system (database 2)
  • Step 1- Customer fills out digital form that enters directly into the system (database 1)
  • Step 2- Staff reviews important information
  • Step 3- Staff clicks “send to department” and info is synced to department system (database 2)

The above three examples show how IT increases business value and it really is about business processes that greatly improve employee productivity. Plus, information is not only captured at a faster rate, but it is also cleared of unnecessary data.  

Obviously, not every system can be automated, but consider where data is double entered and where streamlining can improve the overall process and/or automation does the heavy lifting. Use templates, automated transfers, and systematic approval processes to slow down for checks and balances. That way your business processes refrain from repeating business functions at the expense of the bottom line.

Tip 5 – Implement Strong Cloud Security

As you prepare your exit strategy, the least preferred method is to go out of business before you reach the finish line. If you do not have proper security in place, this could happen to your business. Ransomware, an extremely malicious cyber-attack, threatens every small business in the world. In fact, it is reported that upwards of 80% of all attacks target SMBs with 60% of small businesses that fall victim to an attack go out of business within 6 months of the event.

In today’s environment, there is nothing more important than securing your systems and data. Every day the news brings another story about hacking events, ID theft and ransomware. Moreover, a breach can result in damage to the business’s brand and reputation. That is why it is so crucial to implement and continuously improve the business’s system-wide security.

Imagine if you were a buyer for a business that has a history of ransomware, data leaks and cyber-theft. The brand is essentially damaged, and even if it has been hidden from the customer (not okay…), the business itself is marred and far less appealing.


As you continue to grow the value of your business, a focus on how IT increases business value is going to pay dividends when it comes time to sell. Even if you do not intend to sell, there are increased profits to be had. The goal is to increase operational productivity and efficiencies that seamlessly integrate Operations, Communications and Processes. This will increase the value of your business, thus your bottom line. Remember, a buyer wants to buy a healthy business that makes money.

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