Key to online success - controlling expenses

August 21, 2006 – 5:36 pm

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

I rarely ever see anyone talking about this online and it’s key. The advantage of operating an online business is the low cost structure. I see more and more companies lately that appear to fly in the face of that wisdom. They start up with large staffs and high operating expenses. To me, it’s counter-intuitive and I think these companies should learn to operate profitably, before they seek more capital.

The ease which capital is raised lately is incredible. More and more people have been able to find funding for dubious projects. You wonder what the point is. If the company hires some employees, rents office spaces, and burns through the money, they’re no closer to profit than when they started.

I think the really successful online companies know that you have to keep your expenses low as part of your basic business model. There’s no other advantage to operating online. I guess scalability is one of the big concerns, but scaling up a money loser only helps you lose money faster. It’s a vicious cycle.

People don’t like losing money. So if new startups bomb, the money will come out as fast as it goes in. Time will tell if there really is a bubble going on, or if some of these ideas end up getting critical mass soon.

If you enjoyed this post, subscribe to the Web's Best RSS feed!. See if your website's meta tags are optimized

Related post(s) you may enjoy:

  • Working with yourself or a group on the internet
  • The Same Old Same Can’t Keep Working, Can It?
  • Mobility and multi-lingual capablity - twin towers of Web 2.0
  • Key to long term link building success
  • Ain’t no time for the Summertime Blues for online marketers

    1. 2 Responses to “Key to online success - controlling expenses”

    2. Hi Darren,
      Thanks for your article about saving expenses, and also about the power of blogging. I’m pretty new to the scene with blogs, and my websites were only just being found - got out my second edition of my html newsletter and it looks pretty flash, even if I do say so myself. I like the idea of chat about blogs to pick up more tips and tricks. Great to hear you talk about ‘keep doing what you’re doing consistently’. Really good advice I write about natural energy boosters mostly, but have books and poetry on other subjects too.
      Joan http://theenergybook.com

      By joan small on Aug 24, 2006

    3. Hi Joan,

      Thanks for the comments and for reading.

      Darren

      By Darren on Aug 24, 2006

    Post a Comment