Ben Roy

Yesterday I had something of a flash of personal insight that should never have been that. Why not? Because it was something that I already knew, that I understood.

For one of my businesses, a social bookmarking service, I've been planning to outsource the bulk of the ongoing development and maintenance work by hiring a full time employee in a more modestly priced market than the US. In case that was a little too weasely, we wanted to hire some cheap overseas labor.

The reality is that it probably won't be a quick process to find someone that can be relied on to play a significant role in the business at the price point we have in mind. And then there's the on-boarding, training, etc.

The problem this presents is that while that is going on, too much of our time and energy is going into work that isn't creating new business. It's necessary work, by all means, but it isn't propelling us forward.

Enter the important realization. If I'm not able to use the existing capital and revenue to expand the business, it doesn't serve much of a purpose. Not overpaying for a resource, while seemingly saving me money, is actually costing me much more.

Instead of delaying to find the perfect resource, I could instead overpay for a higher quality resource - someone that's available to start right away. Sure, the immediate outcome would be a drop in net revenue, but the more important result would be the freeing up of other resources to focus on new features, new business, and new revenue.

It could be a tough decision between the two if the cost difference were close to the potential size of the new business. But here we have a small cost (doubling the salary allocation) impeding a huge opportunity. The decision is clear: bite the bullet, get some help in ASAP, and put the focus back on building the business.

In the end it all comes back to something simple: investing in my business will open opportunities for growth that simply won't exist otherwise. The cost of trying to save a little money in the short run would be the long term success of the business.