Why Pay as You Go Works for SMBs
You’ve experienced buyer’s remorse at least once before. But if you’re a small business, the feeling can be particularly painful because you’re making major purchases that have long-lasting effects on your business. Make the wrong choice or overspend, and you risk jeopardizing your business’ survival.
One reason why cutting a check for big-ticket items is especially harrowing for small businesses is because they are most likely spending their personal funds.
According to an Intuit Quickbooks survey, 64% of small businesses start out with less than $10,000. Most of that comes from the owner’s personal savings; 75% of small business owners rely on personal funds to launch their business.
Considering the costs to open and run a business—such as paying for inventory, marketing, staffing, supplies, manufacturing, shipping, and office space—those funds quickly dry up.
Look at the Pay As You Go Possibilities
And it doesn’t necessarily get easier the longer you’re in business. Cash flow is a near-constant concern for small businesses, contributing to about 30% failing within the first two years, a stat gathered by the Small Business Administration. A U.S. Bank survey pinpoints poor cash flow management as the reason why 82% of small businesses fail.
While small businesses can feel like they’re always behind the veritable cash flow eight ball, there are ways for them to better manage their cash and assets without decimating their budget.
One such way is through pay as you go service models. Rather than paying a large upfront cost to purchase a good or service, businesses can pay as it’s used (also known as activity-based billing) or on a recurring basis. The practice is similar to leasing or renting in that there’s the understanding that if you stop payment, the service is cut off or the good is returned to the lender.
Pay as you go is becoming increasingly popular among small businesses. There are now pay as you go options for numerous everyday business needs. These include pay as you go Internet, worker’s compensation insurance, productivity software, office equipment, and office furniture. Even some credit card services are moving to an activity-based billing model, charging businesses a percentage per transaction rather than a standard fixed rate.
Pay as you go helps to alleviate stress on two fronts. First, small businesses don’t have to worry about covering the full cost of something in order to use it. Second, small businesses are better positioned to fulfill other financial obligations, like payroll, that inevitably arise later.
With a more manageable and predictable bill to pay, small businesses can plan ahead and maintain greater control over their finances while still getting the goods and services they need to thrive.
In addition to helping manage costs, pay as you go also affords small businesses greater flexibility. Ending service, upgrading, and adding or returning equipment are typically much easier through pay as you go plans.
Small Business Phone System Flexibility
In the past, small businesses faced a tough choice: buy high-quality but expensive business phones, or buy inferior phones that, while cheap at the outset, turned into an ongoing drain on resources.
Now there’s another option. 8x8 recently launched the 8x8 Flex Hardware Rental Program, giving small businesses access to some of the most popular desk phones through a month-to-month, pay as you go service plan.
With Flex, small businesses have the ability to upgrade, change, or cancel their order at any time, letting small businesses manage their budget as their needs dictate.
And because all Flex phones are optimized for 8x8 Virtual Office, small businesses can tap into robust features like auto attendant, call queueing, and customer relationship management (CRM) systems integration in one convenient communications solution.
8x8 Virtual Office delivers everything small businesses need to enhance customer and employee interactions. Communications is essential for any business, and the right phone system can help small businesses improve customer service and optimize sales and other staff functions. Ultimately, the better a business’ communications system, the more successful it will be at competing against its peers and larger companies.
8x8 Flex Hardware Rental and other pay as you go programs provide small businesses with a more flexible and economic alternative to buying, letting them stretch their hard-earned dollars further and spend it smarter. And it helps small businesses operate on their own terms, which is one of the reasons you decided to start your own business in the first place, right?
Learn more about the 8x8 Flex Hardware Rental Program.