Is Your Business Lean or Cheap?
I just read this blog post referring to a recent study by Microsoft about small businesses using hosted IT services. The study contains a few interesting statistics:
- 40% of companies that used cloud computing services saw a 30% increase in revenue.
- 90% of companies that didn’t use hosted services saw a decrease in revenues.
Those are pretty dramatic numbers. But drawing the conclusion that using hosted IT services or cloud computing makes you profitable would be incorrect. It isn’t the act of using hosted services that makes you more profitable. It is the thinking behind the decision to use hosted services that really makes the difference.
Companies that use hosted services understand two important concepts:
- Running lean is not the same as being cheap.
- Any tool that helps you spend more time focusing on your core competency is a good thing to have.
Lean is Not the Same as Cheap
All small businesses should run as lean as possible. You shouldn’t have an office until you need an office. You shouldn’t have a PR firm until you need a PR firm. You shouldn’t have a $10,000 office chair ever.
But running lean isn’t the same as being cheap. Being cheap is stupid and can kill your business.
A cheap organization doesn’t want to pay for anything. They would rather do everything themselves for free. In essence, their time is worth less than their money.
On the other hand, lean and smart organizations understand that time can be just as, or even more valuable, than money. With this in mind they carefully evaluate each new expense based on the following criteria:
- Will this service make us money?
- Will this service save us money?
- Will this service save us enough time that we can better focus on our core competencies?
If the answer is yes to any of the questions above then they purchase the service.
Hosted Services Let You Hire “Specialists” At a Very Affordable Price
The best thing about hosted services is that you get to hire a specialist for each aspect of your business. For example, we currently use Zendesk, Basecamp, Mailchimp and Batchbook among other hosted services.
Now, we like to think that we are a pretty smart group of people here. Could we build our own help desk solution? Probably. Would it be as good as Zendesk? No. Not because we can’t but because we don’t live and breathe “help desk”. We live and breathe “documentation“. That is what we think about all day. How to make it easier to create and distribute software documentation. We’re never going to give “help desk” software the same level of attention that Zendesk does. I know Zendesk is thinking every day about how to make a better help desk. And I get all of the benefits from that which gives me more time to think about how to improve software documentation.
The same applies to project management with Basecamp, email marketing with Mailchimp and CRM solutions with Batchbook.
Another huge plus is that if these services ever go down it is their job to fix it, not mine.
It’s All About the Mindset
Will using hosted services make you more profitable? Maybe. But being lean instead of cheap and focusing on your core strengths will definitely help make you more profitable. For many small businesses, hosted solutions can help in both areas.
