newCFO

“We sell everything cheap!”

“We are looking for something cheap!”

When I hear the word “cheap” I cringe, and my skin crawls.  Personally I HATE cheap stuff.

Running a company involves acquiring goods and services in order to fulfill a business need (not to just spend money, contrary to what a lot of vendors believe).  Many CEOs, Entrepreneurs, and executives, including CFOs, have too short a visual to discern between cheap and inexpensive.  Often something cheap is just that, CHEAP.  It takes effort to determine clearly what is the business purpose and the business rationale for what is “needed” by the company, then going into the marketplace and figure out which solution will fulfill the business need the best, and then, and only then, the resources (time, money, people, intangibles) needed to procure such item.  Is the cheapest solution the best one?
No if it requires constant maintenance, even if is done in-house, or it will be obsolete in a short period of time (shorter than the business need), require extra attention from people in your staff, or if it will alienate your audience, or tarnish your brand.

So next time someone offers you something cheap, or asks you to buy something cheap, are they misspoken and they mean something inexpensive, with a great ratio of value to price, or are they asking you to scrape the bottom of the barrel?

When you factor everything in, often times cheap is too expensive.