« Heigh-ho, Heigh-ho, It’s Off To Work I Go | Main | The One Book Every New Product Developer Should Read »

Frugal Fridays: Variable, Not Fixed Costs For Business

When managing my personal expenses, I prefer paying costs once rather than paying for each transaction. I'll buy a car, rather than lease it. As a heavy internet user, I'll pay a monthly charge rather than a by minute charge. I'll own rather than rent. It almost always ends up lowering costs.

For business, it is exactly the opposite.

I prefer my expenses to be variable with my revenue. I choose Adword's pay-per-click over banner ads. I outsource activities rather than pay a salaried employee. I rent office space rather than buy a building. Even though it can sometimes end up as more expensive. Why? Because in slow times (like right now), these expenses are either naturally reduced or can be easily shed.

Another plus is flexibility. A big advantage small business has is being able to react quicker to changing environments. That means our expenses have to be able to change also. We can't be using an obsolete or irrelevant fixed asset just because we already paid for it.

Go variable, not fixed with expenses.

Posted by Kimber on September 19, 2008 6:00 AM |

TrackBack

TrackBack URL for this entry:
http://www.nolimitsladies.com/cgi-bin/mt/mt-tb.cgi/1321

Post a comment

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)

About

This page contains a single entry from the blog posted on September 19, 2008 6:00 AM.

The previous post in this blog was Heigh-ho, Heigh-ho, It’s Off To Work I Go.

The next post in this blog is The One Book Every New Product Developer Should Read.

Many more can be found on the main index page or by looking through the archives.

Powered by
Movable Type 3.31