.jpg)
The Cost of Doing Nothing
When improvements are recommended, it can be tempting for business owners to put them off. But delaying necessary upgrades can cost several times more down the line.
Running a business, particularly a small business or one that is just starting up, takes a lot of work, time and, most importantly, money. That puts stress on owners and managers as they work to handle their affairs and grow their businesses to reach their goals.
One of the more costly elements of operating a business is making upgrades, particularly to equipment, technology and cybersecurity measures that have become increasingly important as many businesses now rely on the digital realm for banking, payroll, marketing, communication and many other essential business needs. Other key areas include employee development and succession planning.
Because of the cost of these needs, it is not uncommon for them to be neglected or pushed down the road to be dealt with at a later date.
While it can be easy to delay making these changes because of the cost and a preference to keep operating business as usual, necessary updates that are not made in a timely manner can become much more expensive further down the line.
“For some smaller business owners, every dollar that they spend in the business, it’s really coming out of their pocket. So they’re almost looking at it that way versus ‘Hey, every year let me put aside a certain percentage of the profits for upgrading and making a plan.’ It’s so important to have a plan of what do we want to upgrade the company with, whether it’s cybersecurity, IT or physical capital expenditures, some of the smaller companies don’t really have an absolute plan for that,” says Matt Verney, chief banking officer at Valley Bank.
As far as equipment upgrades go, in industries such as distribution, putting off key upgrades can quickly cost a business by limiting its capabilities.
“We work with a couple of distribution companies that have kept kicking the can down the road on upgrading their fleet, so they’re working with older trucks or not putting more trucks on the road. So you’re limited on how many deliveries you can make. … What they’re seeing is with more trucks on the road they could actually make deliveries to certain geographies more often. So instead of once a week or twice a week, they could get there every day and sell more,” says Verney.
As far as cybersecurity and technological upgrades, failing to upgrade these systems can leave a business vulnerable to fraud, ransomware or data and information theft, negatively impacting business owners, employees and customers alike. When these issues arise, financial burdens can rise into the six figures to fix and upgrade these systems and recover lost assets or critical information.
Many companies have also been turning to AI in recent years for various purposes, including employee development and screening during the hiring process, which can lead to its own issues as these newer systems may leave businesses vulnerable to accusations of prejudice in the hiring process.
“A client of mine called and wanted to use AI to screen applicants. And I said, ‘Oh, you got to be careful with that. What exactly are they screening out?’ says Ralph R. Smith III, shareholder and chair of the labor and employment department at the law firm Capehart Scatchard.
In addition to the hiring process, New Jersey also has a lot of regulations surrounding employment and employee rights, meaning that any employer that is not careful with how they conduct their business and does not stay current with changing laws could open themselves up to litigation.
“A major component and part of my practice that I really enjoy is the preventative side. I do a lot of counseling work, and I try to make sure that agreements are in compliance, that employee handbooks are in compliance, things like that. I would say that I have seen a less than enthusiastic response when I mention to my clients, ‘Hey, we’ve talked about doing this in the past. You want to do it now?’ I’m getting a rather tough response to it, and a lot of it is tied to [not being something these businesses] can really handle at this point,” says Smith.
However, while these preventative legal costs can be burdensome, Smith emphasizes that it’s best to spend some money on prevention instead of waiting to be sued and having to spend 10 times that cost in legal fees.
“From my perspective, I would much rather have clients look at the importance of doing competitive maintenance now. I know that it could be costly given the current economic system, but it can be even more costly if you don’t address it now,” says Smith.
Click here to subscribe to the free digital editions of South Jersey Biz.
To read the digital edition of South Jersey Biz, click here.
Published (and copyrighted) in South Jersey Biz, Volume 16, Issue 9 (September 2026).
For more info on South Jersey Biz, click here.
To subscribe to South Jersey Biz, click here.
To advertise in South Jersey Biz, click here.
