MBA2024 Why Too Many Tools Are Bad For Business

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Hey O. Welcome to the Hundred Dollars MBA Show Business Lessons delivered on a silver platter every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of Webinar Ninja, an independent software company I started with my co founder back in 2014. And in today's lesson you will learn why too many tools is bad for business. If you've been running a business for a few years, you might have accumulated a lot of different tools to run your business. Website Builders Website Hosting Email Email Marketing Chat Software Communication software Video Hosting Project Management Software analytics tools. I can go on and on and on because as business owners when we see something that looks pretty cool that can help our business, we're like yeah, I want that and we add it to our expenses list. But those tools can add up and at some point you start getting to a point of diminishing returns where the tools are causing more problem than they are solving problems. I know this firsthand because in my own business I did a tools audit and cut my tools in half, not only saving my team money, but increasing productivity, communication and the ability to create a better product or service for my customers. I'm going to explain why and how in today's lesson as well as your first steps on how to make sure you're only using the tools that really help your business. All that and more in today's lesson. So let's get into it. Let's get down to business. USAA knows dynamic duos can save the.

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Get a'@usaa.com Bundle restrictions apply. Software tools are great. They can really streamline things in your business. They can automate things. They can help you make more money, communicate with your team, improve efficienc and save you time. But too many of them can really hurt your business and actually hurt your bottom line. I actually experienced this firsthand in my own business and that's why I recently went through an audit and cut down my tools in half. First, I want to tell you that I'm going to show you how to do this, but it's actually not as simple as it sounds. There's going to be some hard decisions, some trade offs, and I'm going to show you how to navigate those and make the right decisions for your business. When I started this process, I divided my tools into four different categories. These categories are actually quite important, so I'm going to define them right now. Category number one is a money making tool. This is a software, a tool of some sort that helps bring in money for my business. These are things like email marketing software, video marketing software, or webinar software. These are tools I use to communicate with my customers, sell, promote, market and bring in. That means I'm making a little bit of an investment to pay for this tool, but I make back multiples of that cost for my business. So this is a very important category. These tools I want to tread softly. I want to make sure, number one, I'm using them. But number two, I don't cut them if they make me money. Category number two, I call this team collaboration tools. Now these are tools that allow me and my team to communicate. This could be things like your email, like your Gmail or Gmail for business. This could be Slack, like your chat software. It could be Basecamp, like your project management software or Airtable or something like that. Any tool that I use to communicate, to work, to collaborate with my team. The third category is tools that keep me out of trouble. So these are tools like analytics tools that allow me to be aware of what's going on on my site. A tool like bugsnag that will alert me when my software has bugs. This could be compliance tools like software that is used for accounting to make sure that I'm doing the right thing financially for my business. I'm providing my accountants with the right tools to again keep me out of trouble. And finally, the third tool is a tool that allows me to deliver my product. It's essential for me to be able to deliver my product or service to my customers. This could be my customer service tooling, how I handle customer service inquiries, emails to chats, something like Intercom. This could be my video hosting if I do videos, or my course platform if I offer courses. This could be Stripe or paypal if I'm charging people. I need these tools to be able to offer my product. Even if I don't market or use any of the first category tools to bring in money, I need to continue to pay these bills so that I can deliver my product, so I can produce it and offer it to my customers. So these are four clear tools, money making tools, team communication, collaboration tools, tools that keep me out of trouble, and tools that allow my product or service to be created and delivered. Now keep in mind, every time you hire somebody on our team, you have to train them on all these tools. This can take a lot of time and that knowledge transfer can be quite overwhelming for the new hire. So keep in mind that the less tools the better so that they can get up and running quickly. I learned this from some new hires recently when they gave us feedback on their onboarding. It's also a lot of work for you to maintain and make sure all these tools talk to each other. And of course you mitigate any risks involved when somebody leaves your company, that you remove access to all these tools. And remember that all these tools for the most part are an expense. So the more you have just pure math wise, the less profit you're going to have for your business. I also want to mention that when there's too many tools, there's too many ways to communicate, there's too many options for your team. It slows them down. Sometimes the easiest thing is to go basic, literally with a paper and pen around the table or a whiteboard. That might be the fastest way to communicate an idea or get to a decision. Even if you're working remotely, you could do this with your camera or even with some whiteboarding app like Miro. The point here is that you want to break down barriers and obstacles from your team so that they can easily talk to each other and work with each Other, so they're not slowed down, they're not waiting, they're not wondering, how should I communicate this and with which tool? This is why small startups can move very fast compared to big companies with a lot of red tape and tons of tools and lines of communication. So when I was doing my audit, I basically went through all four categories. When I went with my money making tools, I said, which ones here have I not used in the last three months? Anything I haven't used in the last three months, Regardless of what I told myself, I canceled. I said, hey, if you're not using the last three months, this means that I'm not using it. If for any reason I pick up later, I can always sign up again. Before I canceled, though, I asked myself, why am I not using this tool if it's gonna make me money? It's a good question to ask because if it's about time of implementing that tool, get someone on your team to do it. It's well worth it if it's gonna bring in cash for your business. The next category, team collaboration, was a big one. We were using Slack, we were using Basecamp, we were using Trello, we were using all kinds of tools to work as a team. The reason why we did that is that some tools are really good at something, but not so great at one or two things, so we would compensate it with another tool. So what I did is we questioned with the team, is this really something that we can't live without? Is there one tool that we can use that will do most of the work, 80% of what we need? And will the business just totally bomb if we don't do the other 20% of the things or try to find a workaround? The answer was no, and that's why we just stuck with Basecamp. Everything is on Basecamp now, and we canceled all these other collaboration tools. I can't tell you how much of a relief it was for me to be able to just go one place to communicate with my team and collaborate on projects together. With this category tool, you want to try as much as possible to involve your team or your heads of department so that it's a joint conversation, it's a joint decision. All these tools can be quite expensive and 100 bucks here, $200 there, it adds up. The third category, keeping me out of trouble tools. This one was a tough one to cut because a lot of these are kind of like insurance policies. You don't need them every day, but when you really do need them, you want to make sure that you have access to this tool. But even so, we went through all the tools and we said, are there any other tools we can switch to that are less expensive, that don't have all the bells and whistles we're looking for? Or maybe downgrade our plan to a plan that's more suitable, where we don't need all the features that we're currently getting. And we did. That went down the line. Whether it was a new relic or bugsnag or any of our analytics tools, when it came to accounting, we made no cuts because we use Xero. And Xero pretty much does everything for us and our accounting team. The fourth category tools that run our business. Now, you gotta be super careful with this one because if it's a major tool that your team uses every day, like Intercom, for example, to support our customers. But we did cut costs in other areas like our web hosting with AWS or our email marketing providers or email services. We negotiated better rates with some of our vendors. And yes, we removed some tools that really we weren't using to fulfill our product or service on a regular basis and just decided to cut them out altogether because it was really a huge desire from the customer. And basically in all four categories, we try to be as ruthless as possible without affecting productivity in the team. And what happened is we actually cut our tools in half and saved thousands of dollars a month. But most of all, it's helped the team focus on what they were hired to do. Their job to be creative, to create a great product, create a great service. Not juggling and learning tools.

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To wrap up today's lesson, one of the things that allowed us to consolidate our tools is that we looked at all our major procedures in our business. So for example, let's say a customer emails support and need something customized on their account. The best way we can serve this customer is to make sure that we can fulfill their request as fast and efficiently as possible. So we took a look at how we do it now and we analyze how we can do it better. And one of the things is we realized that we use a tool called JIRA to file any kinds of tasks for the engineering team to fulfill for support team and we integrated JIRA with Intercom or Support tooling or support chat software. And the reason why this is brilliant and you want to choose tools that work together is that when the engineers finish their request from the customer, they can mark it as done and the support team is automatically alerted inside of Intercom so they can get back to the customer, cutting out the need to talk to support or find somebody and say, who handled this ticket? Hey, by the way, we solved this problem. We customized the software the way they wanted it. It's all done. It cuts out all that for you because it will just automatically tell you when they update the JIRA ticket. So working through all your workflows, all the major workflows your team goes through, allows you to understand which tools to keep and which tools really work well together and cut out steps to make it more efficient and fast for your customer. Now, if you're just starting out in your business, I highly recommend you keep things as simple as possible for as long as possible. Only add tools when you feel like it's going to add value, significant value to your business, whether it's going to make you more money, get you out of trouble or keep you out of trouble, improve collaboration and communication with your team, or improve how you deliver or create your product. Thanks so much for listening to the $100 MBA show. Hope today's episode helped. If it did, leave us a rating and review on your favorite podcast app. We'd love to hear what you think of the show. Please hit subscribe or Follow while you're at it so you don't miss another episode by hitting subscribe or Follow. You get the next episode automatically right on your device. Before I go, I want to leave you with this. Remember, software tools are here to help you. If they're not helping you, cut them out. Or at the very least, question why it's not helping you. Are you not implementing it? Are you not using it? How can you use it? Why haven't you used it? Don't just let another month go by without giving all your tools an audit. Thanks so much for listening and I'll check you in tomorrow's episode Q and A Wednesday. I'll see you then. Take care.

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