Managing expenses is key to a successful business. To do that, you need to understand the actual Total Cost of Ownership (TCO) of your investment. Making your financial decision on purchase price alone is a losing strategy, and this is especially true when deciding what technology and computer equipment to purchase.
Consider the duration and detailed services provided. Most consumer PCs only come with a limited one-year warranty. PCs should be expected to last three years for business use and should have a warranty that matches.
The default warranty on most PCs requires that you pack up the unit and ship it back for repair. This means someone you don’t know has access to the data on your system and your business is without a computer. With some mail-in repairs taking two to four weeks, these are large concerns.
Instead, an ideal warranty on a business PC should provide next day, on-site repair. Downtime, shipping, and any repair costs are important factors to consider when calculating your TCO.
If you are buying a PC from an online retailer or local electronics store, you can expect it to come loaded with “bloatware”. This is the industry term for pre-installed software and apps that your business does not need. Their existence on your computer can slow it down and make you more susceptible to viruses and malware.
Additionally, those PCs will not have all the software tools specific to your business installed. This means you either must take up your own time getting the computer ready for business or pay an IT provider a steep hourly rate to complete the configuration. These expenses should also be considered in your TCO.
security and backup
Don’t forget other monthly services that are critical to safe PC operations. Those include a proper subscription for antivirus, malware, and data backup. Skipping out on those services to save a few more bucks could lead to a catastrophic business loss. Finalize your TCO by adding in the cost of monthly subscription services for security and backup.
Calculating the TCO for a PC purchase can take time and might be overwhelming. That makes it seem much easier to buy the hot deal of the month PC and take your chances. As a business leader, you know you need to make sound financial decisions and you also have to allocate your time to priority business tasks.
Surprises aren’t something that should be accepted when it comes to making good financial decisions. Overpaying for your business’s technology can severely impact your bottom line and limit your ability to invest your profit in growing your business.
Use this guide to calculate expenses related to technology ownership you might be forgetting about. Before you make technology purchases, compare the TCO of your current situation and that of the proposed purchase.
but wait, there's more
There is a lot more to consider before making technology investments. Watch for future blogs on the difference between consumer-class and business-class equipment, what a warranty should cover, unlimited vs. hourly support, and more. We would love to know what else you want to learn about. Please share your ideas through the "Ask Me" survey on this page.
Blogs are posted every other week.
Michael Polzin is the CEO of Leeward Business Advisors and founder of Leeward Elite.