Blogging for Business

Most people think about a local foodie or a crazed political extremist ranting on their blog but blogs are a tremendous if not completely under-utilized tool for businesses. We create content for small businesses and here we'll share some of our more interesting findings.

The sunk-cost fallacy

Brian Ostrovsky - Monday, June 20, 2011

A friend of mine purchased a new lawnmower a few months ago, it was a nice simple push mower that was just right for his suburban front yard. Just a few days ago one of his buddy's bet him $10,000 that couldn't mow the front yard of every house in the neighborhood once a week for 3 months. These two guys love to wager and like finding ways to help other people with their bets. 

My friend was in a situation where he was going to spend 12 hours every Saturday mowing the neighborhood with his push mower until his buddy suggested he buy a riding mower which would reduce his workload to 2 hours. My friend could afford it and the price would be more than covered by his 'winnings' but he decided not to buy the new mower that was a better fit for the job at hand. He told me he was planning on getting a riding mower anyway but wanted to get his money's worth out of the push mower first. Of course, by the time he get's his money's worth the bet will be over and he will have spent about a hundred hours mowing lawns.

So, what does this have to do with small businesses? Sometimes it makes perfect sense to skip buying something new and continue using what you've got but sometimes it's just foolish not to replace something that is no longer right for what you need. Whether your needs change or the market moves staying relevant should be your top priority. I run into this frequently with magazine publishers who was to work as a affiliate which includes a new website with technology specifically developed to help them exploit opportunities that can't even begin to pursue today and beyond technology we provide a sweet of services that they are not able to do for themselves yet I often hear, 'I just built a website (a few months/years ago) and want to get my money's worth before switching to something else.' To be clear, there are times you simply cannot afford an upgrade but for all other instances you should evaluate each decision on it's own and ask yourself - 'Which is the best option given what I know for what I hope to accomplish?

Don't let your past decisions unduly influence your future ones. Learn from them, leverage what you can and then act in the best interest of your business.

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