Why You Should Run Your Business Online 6:
Cost Cutting

Cost Cutting BenefitsThis is the sixth post of the “Why You Should Run Your Business Online” series. If you have not yet read the previous posts, head back to the beginning to catch up.

Perhaps one of the most discussed benefits of working in the cloud using SAAS is the cost-cutting and time-saving benefits they provide.

Since you are running a small business, keeping your costs down is always a high priority.

Since you are running a small business, keeping your costs down is always a high priority. The less money you spend, the more profit you make.

And, as we’ve discussed over the previous posts, managing your time well by reducing unnecessary tasks can provide great benefits.

That’s why it makes so much sense to run your business online.

Value Component 5: Cost Cutting

Running your business online offers you the lowest cost of ownership, both in time and money, for software, data storage, functionality, features and more.

Cloud and SAAS Time and Money Benefits

When you run your business online, you do not need to have:

  • Physical software servers to host the complex applications you need to run your business;
  • Physical file servers to store and share the large amount of data your business produces;
  • Backups configured on all of those servers and their local client computers;
  • Extra electrical bills to run those servers;
  • A method to connect to your company network through a firewall (or to even have either a company network or firewall) with a virtual private network (VPN) connection;
  • Software installed on your computer besides a browser, a light e-mail client for sending and receiving e-mail (unless you work totally online – which you can!) and a virus protection/personal firewall solution such as McAfee or Norton; and
  • Time set aside to patch or upgrade your software as the online application vendor will do that for you as part of their regular product improvement process.
Not having to spend in any of these areas can save your business a tremendous amount of money and time!

Not having to spend in any of these areas can save your business a tremendous amount of money and time!

Granted, the online software vendor will charge a fee, but that is typically much lower than the cost of hardware (not to mention the physical space, electricity and other utilities necessary to maintain that hardware) and software.

And don’t forget the cost of not having to hire any consulting folks to help you install and configure any complex pieces of hardware or software; a cost that can be much higher than what you spent on the software and hardware together!

In addition, you do not need to upgrade your hardware as your needs grow or existing hardware become obsolete. The online software vendor will take care of this as part of their business expense.

Most online software is offered with at least one free package-level which is great for small businesses that are just starting out!

You may be charged more if you take up more disk space on their servers, but it will still likely be less than the cost of owning and maintaining your own server and typically, the reason you need more space is because you business is growing which means you should have the money to pay for the space.

Last, but certainly not least, is the fact that most online software is offered with at least one free package-level which is great for small businesses that are just starting out!

Offline vs. Online Costs: The Small Business Advantage

The software that Sally selected for her press releases process was a business process management engine with workflow functionality (plus all the other bells and whistles we’ve discussed previously).

As part of large consulting firms, I have installed these types of systems, in their offline form, and let me tell you: they are expensive.

As part of large consulting firms, I have installed, configured and maintained these types of systems, in their offline form, at Fortune 100 companies and let me tell you: they cost at least $25,000 and usually cost over $100,000 just for the software.

Often, clients just wanted a few features of the software, but had to buy the whole package to get that feature.

Clients also had to pay for the software, the hardware and the consulting company’s time to set everything up and maintain it over the long term, adding considerable cost to the software purchase.

The solution Sally is using costs her $19.95/month and it does exactly what she needs it to do (and more).

Enough said.

Sally never has to think about backups. Sally never has to think about upgrades except to note what new features she has gained and how to use them. Sally owns no servers. Sally pays no technology consultants.

The solution Sally is using costs her $19.95/month and it does exactly what she needs it to do (and more).

Enough said.

Join me next time for the 6th value component and more examples of the advantages of running your business online.

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  1. BizSugar.com says:

    Why You Should Run Your Business Online 6: Cost Cutting…

    Save not just money, but tons of time as well: Cost Cutting — Part 6 of the 10 part series: Why You Should Run Your Business Online…

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