The Internet of Things has changed the course of the business world. In fact, over $1.1 trillion was spent globally on IoT in 2023. Should your small business increase your investment in this area?

It's an important question. IoT upgrades can mean significant benefits for your business. However, there are costs to consider as well. You'll need the cash, expertise, and bandwidth to get the most out of this strategy.

This article will outline the advantages and challenges that surround an IoT expansion. You'll learn how this new tech could positively influence your company. At the same time, you'll get tips on how to maximize your upside.

What is IoT?

The world has continued to become more connected with each passing year. The internet started as a niche diversion but, over the decades, has become central to our lives. At this point, almost every task and every tool has some level of connectivity.

The Internet of Things, or IoT, represents the place where this concept meets everyday objects. The term refers to the ways in which otherwise common tools use cloud connectivity and digital functionality. In the consumer world, this includes everything from big-ticket appliances (refrigerators, dishwashers, etc.) to smart thermostats or even light bulbs.

These technologies can give a significant benefit to your small business as well. In 2020, just over three-quarters of IoT spending (76%) came from companies. With a faster rise in consumer attention in this area, the share of enterprise IoT spending is projected to dip by 2024, although experts see it staying comfortably above 70%.

Given the amount of spending companies make on IoT, it's clear businesses see significant value in this area. The exact upside you'll experience will depend on the kind of operation you run. Still, it's possible to break the potential benefits into broad categories.

Here are some common areas where startups gain by investing in IoT upgrades:

• Manufacturing: Any machinery you use to produce your products can benefit from added connectivity.

• The office environment: Smart thermostats and lighting can optimize the physical environment in which your team works.

• Security: Keep valuable assets safe with IoT security.

• Communication: Deliver information more effectively with IoT video and audio devices.

• Payment technology: IoT payment terminals can upgrade your ability to collect revenue from your customers.

• Inventory management: Accurately track your products and raw materials, allowing you to stay as efficient as possible.

• Logistics: Connected vehicles, combined with inventory management technology, will upgrade your ability to move product effectively.

What are the benefits of IoT?

We've noted how much money companies have poured into IoT lately. However, that doesn't mean it's the right fit for your small business at this time. Before pursuing this strategy, it's important to understand how IoT can help you.

With that in mind, here are some of the major benefits you can expect from increasing your reliance on IoT:

• Potential cost savings: After the initial investment, IoT technology can ensure that your devices run with maximum efficiency, saving you money on ongoing expenses.

• Collected data: You'll learn more about your operations with IoT, as the devices gather important data. This lets you make more informed decisions.

• Remote tracking and operation: Added connectivity lets you monitor and control your devices remotely.

• Additional flexibility: The functionality you gain by installing a diverse IoT offering will open up the possibilities for your operations.

How to implement IoT in your small business

We've discussed some of the benefits you can enjoy by investing in IoT expansion. If you've decided to push forward with this strategy, it's important to understand the overall process. With that in mind, here are some tips to help you as you move ahead:

Learn your IoT options

Extensive research will give you an excellent basis for outlining your IoT strategy. Learn what's possible with the current technology. This includes general questions about what IoT devices are available for your business needs. Your considerations should also touch on specifics, like the particular makes and models that fit your needs (and your budget).

Look for IoT use cases

Part of your research will require a detailed internal audit. Once you understand the state of IoT technology, you can identify particular places where this can fit into your everyday operations. Look closely at every aspect of your business and discover areas that could benefit from an IoT investment.

Create a plan

Have an overarching vision in place before you begin installing IoT technology. You'll want the right backbone in place to make sure that your specific devices have as much compatibility as possible.

Make security a priority

Adding connected devices can open up significant upsides. However, it also adds to your vulnerability. Cyberattacks represent a rising threat and IoT expansion puts more of your infrastructure into the crosshairs. As such, put security at the top of your priority list as you push forward with this strategy.

Start small and test the results

A major IoT expansion can be expensive. Before locking into a costly program, make sure you're on the right path. Start with a pilot project that allows you to test and adjust. This way, you'll get the most out of your investment when you're ready to take a bigger plunge.

Ensure scalability

As a startup, you can expect to grow quickly. Will your IoT infrastructure expand with you? You need to project into the future as you make your plans. Create a framework that allows you to add as your small business achieves its growth potential.

Invest in training and communication

Tech isn't enough. You need people too. Your team needs to participate in your IoT upgrades, helping to install, use, and maintain the devices. That requires buy-in and a certain level of confidence. Ensure that these critical factors are there by setting aside resources for training and discussion.

Monitor your progress

How much are you benefitting from your IoT investments? Could you be getting more out of the strategy? You won't know the answers to these questions unless you track the impact. Implement ways to gather and analyze data. Then, use those insights to maximize your upside.

Stay ready to upgrade

To get the most out of your IoT strategy, you'll need to stay current with developments in the field. Make this a routine part of your process. That means setting aside time and money to maintain your devices and upgrade as necessary.

Should your small business invest in IoT?

The technology behind IoT will continue to grow, fueling the development of diverse industries. By leveraging IoT solutions, small businesses can garner significant benefits. These include streamlined workflows, actionable insights, and new opportunities for innovation.

By leveraging IoT solutions, small businesses can garner significant benefits. These include streamlined workflows, actionable insights, and new opportunities for innovation.

Harnessing the Internet of Things can give your small business a competitive edge. At the same time, integrating IoT can help you survive in this digital age, which continues to become increasingly reliant on connectivity. Use the information in this article to help determine the best way forward for your startup.