Geeks2U Promise
We guarantee you'll love our fast, friendly service - or we'll refund your money.  
133,572 Happy Customers & Counting
Need tech support?
1300 769 448
Extended hours, 7 days a week
Home  /  geekspeak  /  The one big mistake of small business

The one big mistake of small business

Before your small business invests in too many big tangible assets, ask yourself whether you should leverage new technology to make them someone else’s problem.

The rise of the internet has opened up a whole new world of opportunities for the smallest of businesses, but it has also provided some textbook examples of what not to do when getting your business off the ground.

Two of the best cautionary tales of the dotcom boom were online grocer WebVan and pet food retailer Pets.com.

Excited about the potential of the internet and flush with investor funds, both burned through mountains of cash buying delivery vans, building warehouse space and establishing other expensive infrastructure to support the expected wave of customers.

This “build it and they will come” business model is risky, even if you have deep pockets.

Their gambles didn’t pay off, with WebVan and Pets.com becoming two of the most spectacular disasters of the dotcom bust.

Were you starting those businesses today, you’d certainly think twice before rushing out to spend a fortune on upfront capital expenses like delivery trucks. Instead you might lease the trucks, or simply strike a deal with FedEx.

The idea is to keep your small business nimble and lean – turning many hefty “capex”

Expenses, like delivery trucks, into ongoing operational or “opex” expenses.

Outsourcing to the experts where possible smooths out your expenses, improving your all important cash flow while you concentrate on what you do best. A good accountant can help you crunch the numbers to decide when you should buy, lease or outsource an asset or skill.

If you’re not a trucking company, why buy and maintain delivery trucks? Why add drivers and mechanics to the payroll?

Apply the same litmus test to any major small business investment – whether it be infrastructure or personnel. Are you buying metaphorical delivery trucks when you should lease or outsource instead? At this point in time, do you really need to bring them in-house?

The modern small business might not even need a physical “in-house”.

If your small team can work and collaborate effectively online then you might not need the overheads of expensive office space. Building a virtual office is much easier in the age of cloud computing, with services like Microsoft’s Office 365. You can scale as the size of your business waxes and wanes.

Don’t blindly follow the “virtual business” mantra, you need to think strategically as you grow.

Be careful you don’t outsource your core competence along the way – the thing you’re best at and the reason why you went into business in the first place.

If you run a bakery then you might not need to own delivery trucks but you don’t want to end up paying someone else to bake your bread.

The trick is to stay lean and know when it’s worth spending a little dough to hand over a job to the experts.


About Author

David Hancock

David Hancock is the founder and managing director of Geeks2U, a national on-site computer repair and support company.

Recent News

One of the biggest tech news stories of recent months emerged when the US Department of Justice announced that it’s going to take search giant Google to court, alleging that it has violated antitrust laws in a monopolistic fashion. According to statements reported by the New York Times, “nothing is off the table” in terms

Apple recently launched its 2020 crop of iPhone smartphones, comprising 4 different sizes and models that will become progressively available over the next month or so. The realities of the COVID-19 Pandemic have meant Apple has had to stagger its iPhone 12 launch schedule, with the basic iPhone 12 and iPhone 12 Pro going on

NBN Co recently announced that it’s spending some $3.5 billion dollars to upgrade parts of the nation’s Fibre To the Node (FTTN) network to full Fibre To The Premises (FTTP) over the next 3 years. While the NBN itself has been one massive political football, for better or worse, the practical reality of its near-finished

Virtual Reality, often shortened to VR is one of those “future tech” concepts, along with hoverboards, jetpacks and teleportation that we always seem to be just on the cusp of… but never quite getting there. However, unlike teleportation – which conventional physics suggests might be a bit of a non-starter – or the risky nature

Coronavirus (COVID-19) Update

Learn about the precautions we are taking and our new contactless pick-up and remote service options. Read More
Get help setting up your home office or homework area today. Learn More