Free Versus Paid Apps—When Upgrades Make Sense for Small Businesses

There comes a time in every app user's life when you have to face the hard facts—the free version just might not be cutting it anymore. Of course, no one likes to dish out cash for business tools that won't perform. So, the question is, how do you know when you need to upgrade?

Here are some scenarios to consider before upgrading your business applications or buying new software subscriptions.

1. You see how the business app will pay for itself

Stay with the free version until it helps you generate revenue or improves productivity.

"Never pay for an app unless you have evidence that the money you will generate from it will not only cover the cost but leave enough for a profit," says Daniela Andreevska, marketing director of real estate data analytics company Mashvisor.

"Apps that increase productivity such as Trello and Asana are well worth the investment," adds content strategist Margo Waldrop of The Word Bar.

2. You keep bumping up against the free version's limits

The first clue that your needs exceed what's offered for free is some version of the message, "To access that feature, purchase our premium level."

Limits include the number of users from your organization, how many in the company can use it simultaneously, or the number of transactions allowed.

Real estate investing company Sunrise House Buyers TX used the free version of project management and collaboration app Podio to manage customer calls and leads until it hit the app's volume ceiling.

"The free version limits the number of 'items' per month—for example, a new call or website lead would be considered an item. We knew it was time to update when the Podio notifications stopped coming in because we had reached our limit," says Tino Jaimes, the firm's owner.

3. You've tested several apps and know which one will help the most

Some software categories are so competitive that users have several free options. Once you've tried several and know which business app is the best fit for your needs, it's time to consolidate and upgrade to the most useful app's more powerful version.

"We like to evaluate all options to choose the best one that works for us before opting to pay for all the bells and whistles of a paid version of the tool in question," says Susan Gonzales, co-founder of Silent Professionals, a private security career services platform.

Which premium apps are worth it?

If you only use a free app occasionally, the paid version might not make sense. Once it becomes indispensable, though, you'll want to upgrade so you can make the most of the program's full potential.

Here are just a few of the apps that small business owners say are worth paying for:

• Ahrefs, SEO tools
• Canva, social media images and graphic design
• Hootsuite, social media marketing and management
• Hotjar, website behavior analytics
• HubSpot, online customer attraction and management
• Mailchimp, email marketing
• Podio, Trello, and Asana, project management
• Slack, team communication
• TripIt, trip planning and tracking
• Zoom, video and telephone conferencing

Be thoughtful before making that leap, though, as costs can add up.

"Bigger companies often fall into the trap of thinking it's unprofessional to use a free service and end up paying for software they don't need. If a free trial is fulfilling the business needs, then stick to it and save the cash," says Calloway Cook, president of the dietary supplement brand Illuminate Labs.