Credit Matters Blog

Working Cheap and With Unqualified Employees is Not a Good Business Strategy

Kim Radok 10 June 2018

Your business, whether you are an owner, manager or employee, is for most people the primary income source. It is therefore surprising to see how many people treat the business which provides them with their income, so poorly. For instance, we see all too often business people resorting to the cheapest It and employee options to manage and operate their business.

These strategies are surprising when supposedly, business people are better educated than ever before, have good access to financial resources and the information on how best to operate a business. Despite these factors, all too often we note the continued focus on operating more cheaply rather than actually doing business efficiently and earning money.

We all accept, most business people do not have access to unlimited financial resources. Even with reduced financial resources, common sense would suggest you should always try to obtain the best business resources possible. Building a business, in some ways is like baking a cake. Unless you use the best ingredients and appropriate devices, your cake will never be as good as it could have been.

One of the problems with modern society, is that we have been sold the idea there is always a cheaper option. What is rarely discussed is the context of what we are looking for with this cheaper option. For instance, are we talking about quality, peace of mind, long term value or just the short term upfront price? If you do not think through these issues properly, the cost may be a lot more than you expected. 

I suggest that working with a cheap upfront operating and management philosophy includes:

(i) trying to be your business's the DIY expert in everything rather than employing professionals as required;

(ii) employing people with a minimum of expectations or qualifications;

(iii) using the cheapest IT tools or those not designed for the type of work required;

(iv) believing IT solutions are always best and only solutions and humans are always more expensive;

(v) not reconciling your Accounts payable and Debtors ledgers;

(vi) failing to complete due diligence;

(vii) trying to ignore Government and Legislative requirements.

Too many business people today seem to focus on operating their business cheaper rather than effectively. These business people look to eliminate tasks, cheaper inputs, cheaper employees, or cheap technology tools rather than employ qualified employees. As history showed us in the past, and as current events continue to show us on a daily basis, working without the best business resources you can afford, is a costly exercise.