[mod: split from this thread: http://experienced-people.net/forums...-are-NOT-dead]
Are transport businesses "idiots" to rely on having diesel to put in their trucks?
Are ecommerce businesses "idiots" to rely on a merchant banking facilities?
Are service businesses idiots to expect their staff to come in next week?
Are retail businesses idiots to hope that the road outside their shop does not get closed, rerouted or double yellow lines? or bypassed on the whim of a transport policy?
And so on...
The reality is all businesses have finite margins, and in the "valuable economy" that is the economy that makes things, digs things out of the ground, builds things, grows things or takes things to where they are used , the margins are generally not high 10-20% max. It is the parasites on that economy who make most of the money with far less capital and risk.
That finite margin has to subsume all the business sensitivities and risks. All are hitting together. Cost base increases, people and things, loss of sales due to recession in europe (25% in spain!!) , increase of distribution costs, increases by all the parasites like banks, governments . accountants and all the rest.
When the cost base jumps by 10% on fuel because of speculators in banks who can no longer mess with property derivatives. Government hikes taxes. The cost of goods increases, recession bites, between them pull margins down to nothing. Then even if your traffic component is only 20% directly from search (hardly total reliance)
Then matt cutts getting bored so tweaking a few things can send the business underwater. No one thing of course, but one that is plenty enough to kill in combination.
The reality is all businesses rely on the rate of change being slow enough to allow them to adapt. With google change is too violent. They are the present custodians of search based traffic, soon to be replaced I hope.
Not a subject for this thread, but I think a world economic meltdown , starting with greece and spain and the bankrupt US catalonia and a county in alabama are already bankrupt!! causing this time an unstoppable domino effect in banks, is not just possible , it is actuallly probable, if not inevitable now Are businesses "idiots" to hope , expect and need that the world does not go into economic decline?
I have run a lot of businesses. I only ever had to close one. I had a consultancy / system integrator that won the respect of almost every big blue chip in the north of england, and many souther companies too. Our client base was a "who is who" of British industry. Then in 1992 literally ALL the corporate cheque books closed except for essential maintenance work. Did that make us "idiots"? - noone has seen the like of it either before or since. The fact is all business "rely" on a lot of things to continue at some level.
Businesses only have a finite number of sources to get work. And finite margin. They can hedge their bets between a few, but ultimately they rely on some of the chickens coming home to roost. That does not make them idiots. That just means they live in real world.
I am out of that now. I just do what I do from home, with no employees or overheads so i can survive indefinitely. Not so the valuable economy.
It is pretty galling when despite the real risks of real business the likes of google can trash these struggling businesses for no apparent advantage, to make something different not better. And then they make the crass remarks "it only affects 10% of sites"...as if that were a good thing