Every day entrepreneurs start new businesses throughout the United States. Starting a new business is as easy as it has ever been: anyone could do it within a couple hours. However, starting a business the right way takes some know-how. No matter what type of business an entrepreneur starts, they can easily get in trouble making wrong turns. In my opinion, startups who do not choose to be a cloud-enabled and paperless startup from the start are making one big wrong turn. This article makes a case for why being a paperless startup from the beginning gives it the best chance to succeed.
The Real Problem
Most business owners I know who give up on their business will say their business didn’t make enough money to be worth the trouble. The real problem wasn’t that they didn’t make enough money, it’s that their business was too high-maintenance and costly. Other business owners appear successful, but just keeping their business running saps all their energy. Every day they struggle to keep it all afloat. They constantly find they have no time or energy to grow or improve their business or pursue other life goals. In both cases, the real problem is the same.
All entrepreneurs start off their business moving in the right direction or the wrong direction. In this sense, an entrepreneur decides what amount of success they will enjoy very early on. When an entrepreneur starts on the wrong foot, life quickly becomes difficult for them as their business ramps up, whether or not their business ultimately survives. Where so many entrepreneurs go wrong is with how they handle information. Every business handles tons of information everyday, and virtually every one I come across uses inefficient workflows to do so. I see it in the smallest startups and the largest international corporations.
An Effective Solution
The saying goes that “an ounce of prevention is worth a pound of cure”. Using cloud technology, I have helped several businesses implement completely paperless workflows and avoid the pitfalls their peers face. Cloud-enabled and paperless workflows are effective and efficient for four reasons:
- Loss Protection
I will explain each of these four concepts and how they make a powerful difference in how you run your business every day.
When your workflows are on paper, they can only be in one place at a time, usually a filing cabinet. Whenever you hit a snag because you sent a client an incorrect invoice or you need to gather information for your tax return, you have no choice but to dig through the filing cabinets and bank boxes to find what you need. You will spend a lot of brainpower recalling where you keep it all and how it’s organized. And no matter what, you will have to go to the office to take care of it.
When your workflows are paperless and in the cloud, you are completely mobile. Whether you are in the office, at home or even on a beach vacation, you can get what you need to done faster. If you’re not sure where a document is, you can search for it, edit it, and send it to whoever needs it. The difference is night and day.
Workflows based on paper are very manual by nature. For example, if you send your client a paper invoice, you have to send the client the invoice in the mail. The client then sends you their payment, typically a check. You then have to write up a deposit receipt and physically take the deposit to the bank. You also have to record the revenue and the payment in your accounting system. Or, if you don’t have an accounting system, you keep it all in a folder until tax season comes and you dig through it all over again.
In contrast, when your information is stored in the cloud, the processes for handling that information can be automated. When you invoice a client for your services, they receive an e-mail notification. Rather than mail you a check, they pay the invoice online and your accounting system automatically records the revenue. When tax season comes, your financial statements are already there. If you’re sending several invoices a month, you save countless hours of writing, sending and receiving, filing, and reviewing piles of paperwork.
When you store your information and run processes using the cloud, you can leverage the information to generate reports and get meaningful information. This inevitably results in you having greater control of your business. Ask any of my clients whether their business earned more or less profit this month than last month, and they can get the answer on their smartphone in less than five minutes.
In contrast, I know many business owners who have no clue how much profit their business really earns. They also struggle knowing which customers aren’t paying invoices, how much inventory they have in stock, or whether their expenses are out of control. The problem isn’t that they don’t want to know, it’s that they just can’t. Who has the time to dig through endless piles of paperwork to keep track of it all?
Businesses with manual and paper-based processes are very difficult to grow profitably. With all the problems I described in the last few sections, owners simply cannot keep up without hiring more people to help out. Hiring someone else to do something you hate doing yourself is neither cheap nor fun. All the while, the owner gets a serious headache even thinking about growing the business further.
On the other hand, a cloud-enabled and paperless startup grows more easily because its workflows are efficient and often automated. Because workflows are less time-consuming, owners and employees find it’s easier to stay on top of things and can focus on making improvements, growing the business, or simply taking much needed time away. Owners who know their business runs on effective and efficient workflows can better trust their employees to get things done right. Employees in turn feel empowered and liberated, free to do better work. Ultimately, I find entrepreneurs are more relaxed and confident facing the future when they run on the cloud.
Protection from Loss
Another big benefit of cloud-enabled and paperless workflows is how your data is protected from loss. I imagine all of us have heard those horror stories of people who keep all their important files on an external hard drive until, one day, it crashes. In this scenario, the business loses its data forever without using an expensive data hard drive extraction service. Such services can cost hundreds or thousands of dollars, and sometimes they are unsuccessful. Either way, the business will also have to purchase a replacement hard drive.
In contrast, businesses with cloud-enabled workflows and who store their documents and data in the cloud are free from these worries. If a business computer crashes, the replacement computer can pick up right where the old one left off. While you’re waiting for the replacement, you can just keep going on another computer, tablet or smartphone. Because cloud services mostly run in a web browser, you don’t even need to install any special software first.
Common Concerns about Paperless Workflows and Cloud Technology
When I meet a small business owner and they ask me what I do, their reaction to my answer is telling. After I explain that I help businesses go paperless and adopt cloud technology, they may react by rolling their eyes. They might say something like: “I have heard people say for years that everything is going to go paperless, but it still hasn’t.” They’re right that not everything is totally paperless, but many businesses have successfully gone paperless, even if many have not.
Innovate Professional Services is a paperless and cloud-based business, and so are our clients. It is entirely possible for anyone willing to invest in the positive change. The sad truth is that businesses who reject the benefits of this technology are also rejecting its benefits. In the long run, businesses who fail to make the change will get left behind.
Others worry about security when they store their data “in the cloud”. While data security is always a valid concern, the reality is I trust our cloud technology vendors with the security of our data more than I trust myself. Data breaches are too common and oftentimes inevitable. However, if you’re using cloud services properly, you don’t need to worry about whether you’re keeping your data in a safe place – that’s the service provider’s job.
One final concern I often hear is from people who don’t like paying monthly subscriptions. They want to pay once to get software they need and be able to say they own it. This one baffles me every time. When I run the numbers, I most often find that monthly subscriptions make more financial sense. On average, purchasing the desktop software equivalent to a cloud service costs the same as 6 years worth of subscriptions.
Furthermore, whether anyone likes it or not, most software companies are moving towards subscription-based models (see Adobe Creative Cloud). Plus, when you’re on a subscription for cloud services, you’re always getting the latest version and all the latest features.
For you to become a cloud-enabled and paperless startup from the start is an investment. You must invest additional time and training up-front to make them work. However, the payoff can be huge. When you run on the cloud and go paperless, your business is easier to manage and, frankly, more exciting to be a part of. I have seen it in action and I am passionate about the results it provides.
If you want to be a paperless startup but need help to do so, contact us and we will help get you started right.