Opportunity
and Obsolescence: Buying Technology
One way to tell the age
of technology is the price. As a product is being developed, the price
is usually at its highest. Once research and development costs are
covered, production increases - and so does competition - and the
prices start to drop. However, if you wait and see too long, it may
be too late. Technology is at its cheapest when it is nearing obsolescence.
Even a free slide rule is useless to most people today.
Approximately a year before
the introduction of compact disc (CD) players, record players could
be purchased at bargain prices. However, if you try to purchase many
LPs today, you will find it difficult to keep up much of a collection.
Computers also become obsolete quickly. The 286 and 386 computer chips
quickly gave way to the 486. A 286 may be usable for some word processing
and record keeping. However, if you become part of a network or wish
to use the newest in time saving software, a 486 may be necessary.
How do you make decisions
for your business?
- Understand what you
need and what technology can do for you.
- Know what's coming in
technology.
- Assess what technology
will help you be more productive and profitable
- Ask other businesses
and entrepreneurs with similar needs what technology they use.
- Budget for short term
returns - with changing technology, five years is too long of a
time to reap a return on your investment.
- Ask about support. Training
and customer service is an important part of the equipment investment.
New needs create new
opportunities
Besides enhancing existing
businesses through increased productivity and profits, the telecommunications
explosion is creating opportunities for new businesses.
The telecommunications
trend is creating new needs in the marketplace - needs for integrated
software, new equipment, help in designing telecommunications for
homes and businesses, and even for the education needed to use technology
effectively. These needs are the seeds of new business ventures and
opportunities.
In the past, North Dakota
entrepreneurs were hindered by obstacles like geographic isolation
and limited access to information resources. Technology now allows
us to obtain information, communicate with customers and provide services
faster than the prairie wind.
Look around you - how can
technology be used to help individuals and businesses? Here are just
a few examples of entrepreneurial ingenuity at work using technology
and telecommunications
High-tech pioneers
Echo Communications Group
Inc., an electronic bulletin board that serves as discussion groups
for such topics as health, politics, sex and the media. Only two years
old, the company has 2,200 subscribers. Created by Stacy Horn,
an unpublished novelist with a fine arts background.
Entrepreneur James Greenbaum
Jr., created an opportunity by leasing the excess capacity in
fiber optic lines of long distance giants AT&T and MCI and providing
telephone services to local and regional businesses. In 1994, when
Greenbaum celebrates his 36th birthday, his company is projected to
hit $50 million.
Douglas Clements helps
other entrepreneurs find financing with his computer on-line service
linking entrepreneurs with potential investors. Investors and entrepreneurs
pay a fee to be included in the network. There are currently 270 companies
on-line.
Launching an idea before
its time, entrepreneur Walter Forbes waited nearly two decades
to see his business idea turn profitable. His company, CUC International
Inc., which he started with a partner in 1973, sells retail products
through interactive television. After nearly 20 years of losses, CUC
is profitable and generates $900 million in sales.
In order to stay home with
her children, entrepreneur Erica Swerdlow started her public
relations firm with a fax, computer, printer and telephone. With help
from her brother, who has a business integrating technological systems,
her firm is projecting $500,000 in revenues the first year.
A health care merger caused
Suzane DeClerque to lose her job as a medical transcriptionist.
Determined to make a living, Suzanne started a business that uses
technology to provide medical transcription services. Today, her business,
Words Express, employees 20 people and provides services all over
the country from its location in Fargo.
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