Control vs. Cheap

Do not confuse cost control with being cheap. Cheap is using electrical tape to fix an extension cord that has been cut in two. Cost control is using an iPhone 5. Don’t follow fads. Do stick to sound business practices. One of the most important is identifying purchases that are true needs and not just wants. Wants can easily be confused for needs. In business, a need is something that literally would prevent the organization from being able to deliver services. For example, McDonald’s needs hamburgers. Things that directly impact the viability of the core offering make the need list. When it comes to a bigger and better office space though, most likely that is more of a want or even nice to have than anything else.

In fact, controlling real estate costs without comprising basic standards of decency can be really challenging in China. Especially for entrepreneurs, figuring out where they will work can be a big issue. Rents are sky high. Buying property is even more unrealistic in the current market. Therefore, a key to controlling costs in China comes in good space utilization. Identify what is truly the smallest space necessary to run the business. Realize that rent is only one part. Factor in related costs such as the management fee, and heating fee. Bigger spaces mean more furniture is needed, yet another cost. More workers mean more computers, which will use more electricity and water. Plus all those mouths need fed so get ready for a rising payroll. This is how a small-startup starts bleeding red real fast. Understanding how, when and where to spend money on behalf of the business is really what it’s all about. Even Apple has proven the point, endlessly leading the pack is tough. They have been riding on the coattails of Steve’s iPhone for a long time now, with new iPhone’s seeming less and less “game-changing” and more of the same old oatmeal. They have even gone so far as re-releasing what is essentially the old-iPhone 5 and calling it the SE. Really? Its sad when that’s the best Apple has to offer. The point, every company has its hay day. As the bumper crop comes in, don’t ever lose sight of the bottom line. Control costs from beginning to end. Keep the operation lean and mean. Don’t confuse wasting money with investing money.