How Startups Use Automation as a Key Driver

Four people around a laptop discussing automation processes.

To find market success amid a sea of ever-growing industry competition, startups can’t just stumble from one terrible idea to the next while ineffectively planning their operations, poorly leveraging their resources, and creating random approaches for execution. Startups need to harness specialized tools and strategies for their processes that can help them stay afloat while they work to make up for the lack of finances and capabilities that older, larger companies possess, and automation is the key. 

Below, our experts at TaxRobot will explore how automation serves as a critical driver in startup growth and success in the current business era. Please continue to learn the essential elements you should know about automation in a startup, its wide array of critical benefits, and how you can leverage it to help promote the financial success of your new business.  

Related: Qualified Research Expenses (QRE): A Complete Guide

Automation: The Basics to Note

Automation is the creation and use of specialized applications and technologies to produce and deliver various goods and services with minimal human intervention. Automation technologies, techniques, and processes are specifically designed to improve the efficiency and reliability of products while also speeding up the overall creation process. In short, you can think of it as a tool or system that allows processes to run automatically. Automation is especially prevalent in the manufacturing, communication, transportation, and defense industries, alongside many others.

Startups can leverage several automation types and approaches that fall under the three primary automation systems– fixed (or hard), flexible, and programmable. Some of these automation types include;

  • Basic automation
  • Integration automation
  • Process automation
  • Industrial automation
  • Computer-aided manufacturing (CAM)
  • Artificial intelligence (AI) automation
  • Conversational automation

Related: R&D Credits & AMT: Here’s What to Know

People working on startup automation plans at a table.

The Key Advantages of Automation for Startups

For startups to succeed and grow, they’ll need to access extensive business resources and leverage them as effectively as possible, which automation can quickly help with. Automation technology benefits startups by assisting them to do more with less via the streamlining of specific tasks. It also makes scaling much more manageable, even if you don’t have access to additional resources. Specifically, automation helps startups by;

  • Helping them save time
  • Allowing for centralized communication
  • Providing standardized processes
  • Enhancing multi-department visibility
  • Enabling better utilization of human capital
  • Allowing for superior data collection and analysis
  • Lowering operating costs
  • Improving worker safety
  • Increasing rates of ROI (return on investment)
  • Minimizing factory lead times
  • Increasing production output
  • Enhancing consistency of product quality
  • Reducing the need for outsourcingAllowing for easier integration
  • Increasing productivity and efficiency
  • Increasing system versatility

Whether you’re the owner of a new startup or a massive business that’s operated in the market for years, you’re probably looking for ways to make taxes easier to handle. Thankfully, our experts at TaxRobot can help by providing access to our specialized R&D tax software this year!

Four startup employees at a meeting on automation.

The primary issue with automating is determining where to start implementing it first. Because while automation can provide significant benefits to all kinds of departments and different startup operations, you probably won’t be able to implement automated procedures everywhere at once. It’ll take time to get everything automated, and you’ll likely have to incorporate automation into different areas of operation over time. 

To help you make this critical decision, we’ll explore three of the primary areas that startups and other businesses tend to automate first to enhance their operations. The one you choose to automate first will ultimately depend on your startup’s needs and goals, but this should at least help give you an idea of where you should start.

1. Supply Chain Logistics

Effectively managing the supply chain for any startup or business can be a full-time job without automation. You’ll need to carefully track and restock inventory manually, change orders and processes on a monthly basis, and more. You’re also more likely to encounter issues related to human error, which can severely hinder business operations. Supply chain automation can help your startup perform better via demand and inventory forecasting. It can also help you streamline order entry, and product delivery, and improve operational and labor efficiency. 

2. Marketing

Marketing is critical for any and all businesses looking to sell products and services, especially startups that need to start to gain the attention of prospective customers. Marketing automation is an effective solution and can become even more helpful once a startup starts experiencing growth and needs to expand its operations. Marketing automation can involve many moving parts, depending on the marketing methods your startup utilizes. Some common examples include activation triggers that release subscription forms and welcome emails.

3. Human Resources

Human resources departments rely heavily on various forms, documents, and processes to run effectively, and automation can help streamline everything. HR personnel can leverage a wide range of automated tools to send out the needed forms and alerts, all while keeping important information safe and preventing data loss. HR automation also provides increased business security and can help avoid issues related to tax mishaps, legal trouble, and unnecessary expenses. 

Related: How Startups Benefit from the IRS Seed Stage

Concluding Thoughts to Keep in Mind

Newly developed startups need to keep up with their more well-established competitors within their respective markets, and automation can be an essential tool that helps them do just that. Suppose your startup is struggling to operate effectively and keep up with the ever-rising demands of consumers. In that case, it’s probably time to consider some practical automation tools and processes to help keep things moving. 

To learn essential information on how to help your startup succeed, please consider exploring our selection of other expertly written resources provided by our team at TaxRobot today. Also, consider contacting us to access additional know-how regarding our specialized AI-powered R&D tax software and learn about how it can help your startup start earning bigger refunds this year.

Are you the owner or developer of a new startup looking for an affordable and effective way to approach your R&D tax credit? Our team of tax specialists at TaxRobot is here to help make the process as easy as possible while audit-proofing your most important paperwork and earning you bigger refunds!

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