Everything is free on the Internet, right? While that might have been the case in the past, it isn’t any more. Innovative tech firms have discovered if they want to build a sustainable business, they have to have a revenue model. That model requires they find a way to get users and visitors and community members to pay for some or all of the services they receive. While that means it is more expensive for small businesses like mine to use online tools, I am actually in favor of the decline of free software. Why?
- It’s risky to build a business on free tools. When they go away, you can find yourself without an appropriate replacement. For example, we used Do.com as our project management software. It became an integral part of our business, and then suddenly the product was discontinued. That left us looking for something new at a time when we were busy and needed our software to just work.
- Subscription fees fund development. As their revenue base expands, tech firms are more likely to continue to upgrade and improve their product. That means my tools will get better over time.
- When users become customers, they have a right to expect better service. Successful firms will focus on up time and being more responsive to questions and concerns.
- Mediocre products will fall by the wayside. People are likely to sign up for free trials, but they become much more discerning when they have to pay for the service. The best products will see their subscription base grow and others will fade away. That means I won’t have to experiment with as many different products to find a project management program, CRM tool or mail marketing platform.
As subscription-based software models become the norm, there is a downside for small business owners: $5.99 here and $10 there can really start to add up. If you are not paying attention, you may find yourself paying hundreds of dollars a month for software that you aren’t using. To control your costs, it’s a good idea to make a complete list of all the software subscriptions you have. Be brutal as you review the list. Do you really need all those tools? Just like that dress you haven’t worn in three years, it’s time to give up subscriptions you don’t need.
What software tools do I think are worth paying for? The list will vary by business, but these are the top three I can’t imagine running my business without:
- Constant Contact Our email newsletter is 11 years old. For $75/month, we share information with thousands business owners every Wednesday morning. Every week, a few are interested enough to call, send a note, download a form or buy from us.This tool consistently fuels our sales funnel.
- Tinderbox Using this tool,we have cut the amount of time it takes to prepare proposals by 75%, and we close more sales because we look professional. We have a complete record of every quote, so there are few disagreements over scope creep, terms or expectations. Spending $90/month is a reasonable investment for all that we get.
- RavenTools Yes, we can use Google Analytics for free, collect data from social media platforms, and email tools to create custom reports, or we can use RavenTools to do that for us. We could spend hours trying to audit our website looking for broken links and bad images, or simply run a Raven report. The bottom line? RavenTools lets us spend less time creating reports and more time working on action plans as a result of the date. Two versions Pro ($99/month) and Agency ($249/month) are available.
It’s a tough adjustment to pay for tools, but if I expect to charge others for my services, I have to assume I need to pay for the services I want. Planning your 2014 budget, plan on paying for the tools that run your business.