Tuition Business Lesson #7: Counting Beans, Saving Fees

Saving on Cloud Storage

Most startups bootstraps in the beginning. We were like that. But there were things that we should spend money on, and some we should save on. Not all expenditures were to be shunned.

I made my fair share of mistakes at the start, wasting a few hundred dollars in buying files to make welcome packs, and buying many soft toys as signup gifts. My mistake was that I did not have a proper follow up plan, and I did not have detailed instructions for the team on how to use them. I learnt my lesson.

Yet there were some expenses which took, in my opinion, a disproportionate amount of time and effort to save. Effort spend on finding the best deals, and in debating these expenses, could have been spent on doing more thinking on the business.

Quite a few times, we were indeed penny wise, pound foolish.

A case in point. We were using a free version of Dropbox to store teaching material and important finance and administration files. As five members were sharing it, the data limit of the free version quickly hit the cap. We had to either pay a monthly fee of about SGD 15-20 to get a much bigger capacity, and thereby solving our storage capacity problem once and for all, or do manual deleting of some files whenever the storage capacity cap was reached.

Amazingly, the team decided to stick to the second approach. I shook my head in disbelief whenever there was a display of “great teamwork”, when someone complaint that he could not save his files in our Dropbox folder, and we had to delete some files to make room. This was a classic case of sweating the small stuff.

Also, this sent a signal that the team was not really moving towards a scalable way of working. A cloud drive like Dropbox allows information to be shared easily among team members. That is a infrastructure for collaboration. Keeping information offline points in the opposite direction.

Saving Consultation Fees

When we were in business, there was a government grant for tuition centres. Bruce did the application of PIC grant by himself. It did not materialize after much effort by him.

For my own company, I engaged a grant consultation. I paid the consultant about 10% of the claimed amount to prepare and process the paperwork. They gave me advice on what were claimable and how to file the grant applications so that it could get approved smoothly. I got the grant.

LEARNING POINT:

I learnt that while we want to bootstrap, we also need to know our strength. If something is not our forte and our likelihood of success is not high, it’s better to engage a professional to do it, even if it means we have to pay for it.

When hiring outsourcing partners, other than considering the price point, I will strongly recommend going for someone who is aligned in value with you. Work with someone whom you admire and respect, even if he is not the cheapest option around. While you will be paying for a good quality job and great advice, you are also building your network. Chances are that if your outsourcing partner likes you, you will also tap into his network. He will look out for your interests, as you look out for his.

Avoid hiring a vendor or outsourcing partner because you feel that you can “squeeze him dry”. If you don’t want him to succeed, chances are that he also doesn’t want that about you too. Why work in such a partnership?