Are these two common business traditions losing you money?

Are these two common business traditions losing you money?

Are these two common business traditions losing you money? 1200 630 Colin Kennedy
Image: Coins in a fountain

The practice of throwing coins into a fountain – to invoke the favour of the gods – is so widespread that in some places they have notices asking the public not to toss coins into the fountain because it’s terrible for the fish.

There are some modern business practices that amount to the same thing.

Historians debate about where the practice of tossing coins into a fountain started, or the reasons for it. On the one hand, experts claim it was to ‘invoke the favour of the gods’ (make a wish) as they did in Ancient Greece or ‘to thank the gods for clean water’ as they did in Ancient Rome.

In any event, the objective of the activity is to derive a benefit. 

Regardless of the origins of the practice, it brings to mind two modern-day business traditions practised by New Zealand companies – all with some benefit in mind – but that potentially are no better than tossing money into a fountain:

  • Leasing office space
  • Waiting until a product or service is market-ready.

Expensive leases on office space

Until recently, leasing or buying expensive office space – once you outgrew your home office – was considered a natural next step for a business.

Part of the reasoning may be that a home office cannot necessarily accommodate a growing team and possibly doesn’t present a professional image (depending on the business). 

The COVID-19 lockdowns this year brought the realisation that expensive office space – and the obligations associated with occupying an office – as well as all the perceived benefits, may be more traditional than practical.

Something the traditional office does well, however, is that it brings teams together – it fosters culture and innovation. 

An alternative, and less expensive option, to getting the best of both worlds may be moving into shared office space. A growing number of shared office space facilities offer companies (or individuals) options to hot desk, rent private office space on short term agreements or opt for a dedicated desk. 

Décor, utilities and services are all taken care of, and best of all, nobody is locked into long, onerous and expensive office leases.

Product ready or market-ready

Another common practice is for businesses to wait until a new product or service is ready-packaged and in saleable form – before they take it to market.

Market ready is another myth that may result in opportunity cost. Holding fire deprives you of the chance to test the market, and is a drain on cashflow, time and energy long before you can expect a return on your investment.

As bestselling business author David Burkus wrote in the Harvard Business Review, new product launches are always a gamble but selling a product before it exists “looks like an effective way to stack the deck with minimum losses and maximise possible gains.

“It may not be the right strategy for every industry. But if it’s possible, consider selling your new product before it exists.”

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