Comments on: Investors aren’t worth the trouble?

By: newhorizon

newhorizon — Fri, 26 Dec 2008 07:32:27 +0000

Do business owners who outsource their labor force believe that foreign workers are as good as US ones?

Quite honestly they don’t care. And I know this to be a fact from a recent meeting.

The reasoning? Even if the skill level is low (which was admitted to) and the output level not quite as high (also admitted to) the results in cost savings would boost the profits high enough that the real productivity and quality assurance standards don’t come into play.

By: Alastair McDermott

Alastair McDermott — Sat, 20 Dec 2008 04:16:38 +0000

Hi Anita, thanks for your comment!

I agree with you in arguing that marketing costs are not zero, despite the channel being next to zero cost (though don’t forget connectivity and technology are not completely free).

In general I see that a lot of small business owners tend to devalue their own time completely.

I know that sometimes it’s expedient for an SME owner to do marketing, operations and other work themselves, but there are plenty of times when it’s so much better to delegate or outsource.

One obvious example is accounting – most small business owners I know have an external accountant and don’t do their own end of year books in house. However, when it comes to other business components they dive in head first.

By the way, I’m arguing that businesses should outsource, delegate and hire in external specialists rather than trying to do everything themselves, but I do this myself all the time! Sometimes there are situations it’s necessary. The obvious reason, with the current credit crunch, is that cash flow might necessitate going DIY (Do It Yourself).

I think we just have to figure out the balance and focus on the core parts of our businesses, and delegate as much of the rest of the pie that we can afford.

Thanks again.
Alastair.

By: » Marketing on the Web Really Is Not Free Selling to Small Businesses

» Marketing on the Web Really Is Not Free Selling to Small Businesses — Fri, 19 Dec 2008 05:32:39 +0000

[...] Website Doctor raised an interesting discussion about startup costs. He pointed to a Paul Graham article, where Graham suggests that the costs of starting a business [...]

By: Anita Campbell

Anita Campbell — Thu, 18 Dec 2008 22:47:50 +0000

Hi Alastair, I think it is definitely true that many hard costs are next to zero — certainly very low.

The one area I would push back against Paul Graham on is marketing. It’s not entirely true that marketing costs are zero. In fact, it costs something to market online, what with SEO and Google ads and content creation and other techniques.

It may be setting up entrepreneurs for unrealistic expectations for Graham to say that “the Web has made marketing … free.”

Most startups either have to spend a lot of time or a lot of money — or both — to build a presence online. One way or another, it costs something. It certainly did for me.

Best,
Anita