04:Cost of Business-Then & Now
As I sat at my computer watching yet another training video about new software that I have started using, I started thinking about this new business world I am part of. I’ve been an on-again-off-again entrepreneur since the late 70’s when I started my first micro-business.
I got thinking about the huge differences in how we can run a business from our lap literally sitting anywhere in the world. Back in the 70’s (or 80s or 90s), this was almost inconceivable. Now we take it for granted.
So I thought I’d put together a quick comparison of doing business back then versus what we do today. This is not precise in my estimates of costs, but is my memory of what I personally experiences in several of the businesses that I started.
So here’s my walk down Memory Lane…
Comparison of costs of doing business today versus 1990
A long time ago, in 1990 (like 200 years ago in “technology years”), having to buy stuff, rent office space, travel to see clients and all the other expensive aspects of being in business helped to create many jobs in our economy. But his was a significant barrier to entry for starting a company, so it is a good thing that there were so many more jobs available then.
Now, because of Internet-based technology, low-cost computers, mobile devices and cellular networks with their smart phones, many of those jobs have gone away and our economy has shifted from employment-based to an entrepreneurial economy. Surviving in today’s world requires an entirely different skill set (and motivation), but results in greater opportunities for self-fulfilling work and financial gain.
Here's my list...
| Circa 1990 | Now |
| Copiers | No longer needed usually, but can be done using printer or offsite at copy/print stores. (Prices are about the same or less than 25 years ago.) |
| Postal costs (stamps, overnight packages) | Use emails, pay online, automatic payments and deposits, online animated greeting cards. When was the last time you bought a roll of stamps? |
| Stationary | None required, or created within Word |
| Fax machine | What’s that? |
| Legal costs | Use LegalZoom, copy legal documents from free Internet sources, Ask-A-Lawyer sites for small fees. |
| Incorporation – having that “Inc.” after your business name spelled legitimacy ($1000 or more for legal fees, government fees) | DYI (LegalZoom or simple filing with state agency), or don’t even incorporate. No one cares about seeing the “Inc.” or “LLC” in your name now. Incorporate only if you feel exposed. |
| Business licenses | Most businesses at home no longer are required to get local business licenses. |
| Accounting by CPA or computerized (expensive accounting software $1000-2000) | QuickBooks, Xero, Wave, etc. – online software, all between $7-$40 per month, some are free |
| Commuting to downtown office | Design your own lifestyle business, stay at home, work on a beach somewhere |
| Office (rent, furniture, utilities, phones, staff) $1,000 – 5,000 per month) | Work from home (and take a tax deduction, so this actually is a gain rather than a cost.) This used to be illegal in many communities, and it was unacceptable for “legitimate” businesses. No longer true. |
| Furniture | Use what you got, or buy off of Craigslist |
| Consultants, advisors, copywriters, graphic designers | As a small business, I rarely hired these people because I couldn’t afford them. Today, I can and do hire them using Fiverr, eLance, etc. |
| Brochures | Usually unnecessary – refer to your website |
| Stationary | Usually unnecessary |
| Medical insurance ($1,500 plus per month or even uninsurable if you had pre-existing conditions) | Affordable Healthcare Act ($500-$1,000, depending on where you live, and if implemented by your state) |
| Telephone lines | Google Voice, Vonage, low-cost 800 service |
| Yellow pages listing | Craigslist, social media, Google Ads |
| Recruiting agencies | Craigslist, Monster.com |
| Advertising agencies | Google Ads DYI or hire placement specialist |
| TV, radio and newspaper advertising | Social media, Google Ads |
| Scope of business opportunities: local (maybe statewide) | Global via Internet or lifestyle traveling |
| Business location: city that you live in | Travel the world and still do business |
| Travel to see out-of-town clients (airfare, accommodations, etc.) | Web cam, webinars, social media, websites |
| Hiring an assistant (salary, benefits, desk space, supplies, etc.) | Outsourcing abroad, eLance, Fiverr |
| Apparel: suits or dresses, ties, shoes | Pajamas, gym shorts |
| Childcare: babysitters, daycare | Stay-at-home |
| Business Networking Clubs ($50/month) | Social media, mastermind groups, Wealth Affiliate (networking, yes, but so much more!) |
Do you have any more items to add to the list? Most of these items reflect profound reductions in costs of doing business, but maybe there are some ways that costs have gone up. Everything seems to be so much faster today. Or is the learning curve slowing us down (like my having to learn how to publish a screencast)?
So, what do you think?
~~~
Tip Kilby
Recent Comments
11
I love seeing it laid out like this, an accounting perspective of the massive paradigm shift we've been through, or others are actually still going through. You have a great writing style and practical perspective that is going to serve you very well in this new business venture you are starting! ~Shell
Thank you so much Kip! This was REALLY interesting. We started our own business in 1988, so I identified with the left hand list for sure!
Yes, and I'll bet you can think of more - I came up with this list quickly. I'm constantly amazed at the amazing capabilities that we have today compared to what we had fairly recently.
Awesome list Tip. It is amazing how things evolve. I am still blown away by computing power then and now. My phone is more powerful than my computer I built with the highest end components 4 years ago. It is nuts!
Kyle, you weren't born yet when I got started back in the 70's. My first computer experience was loading a program (on punch cards) into an IBM mainframe computer that took up a whole building. My program sorted 50 items into alphabetical order. It took me two days to write the program (I dropped my card deck and lost the program order, so I had to write the program again!)
After that course and two others, I swore that I'd never work for any company that needed a computer to run its business. That promise lasted one year! I soon fell in love with the smaller "mini-computers" that only cost a few hundred thousand dollars. You're right - our phones today carry way more power and storage capacity than these behemoth computers!
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I never really gave it much thought (and I have an accountant brain as well) so this list is interesting and you're so right. Thanks for the insight.
Well, true accountant behavior would have been for me to put the costs then vs. now in a spreadsheet with a column for %Growth! I restrained myself since I didn't want to spend hours writing the article!!
LOL. That is SO true! I laugh because that sounds like something I would do. We should write a book: My life explained by spread sheets. I love being retired, but I don't miss my job. I can still use those spread sheets though.