Entrepreneurs are often looked at as the driving force behind innovation, but they can also be incredibly penny-wise and pound-foolish. The business world is rife with entrepreneurs who believe that there’s a shortcut to success, whether it’s through getting funding from friends or family members or by selling their company before it becomes successful.
The penny-wise, pound-foolish is an example of a phrase used to describe the idea that it’s better to spend less money now in order to save more later.
I read Taking care of the cobbler’s children on Nash Ramblings over the weekend. This is sound counsel, backed up by personal experience and some plausible horror tales.
Author Donald Patti begins by telling the tale of a successful small company that is momentarily hampered due to a system failure. He declares:
Despite the company’s apparent success, the network equipment was almost a decade old, the servers were all used or reconditioned, and the workers’ desktop PCs were more than two generations old.
He’s talking about fundamental economics, where capital and people have an impact on production. Why do business owners allow this to happen? He inquires and then responds:
Small-business entrepreneurs often grow their companies from the bottom up by continually straining human resources to compensate for a lack of capital investment or technology, compensating their workers with ownership or big delivery incentives in return for working long hours. With time, the entrepreneur begins to associate scarcity and hard workloads with success.
This is an excellent lesson and a timely reminder. The majority of businesses rely on computers, and outdated, sluggish PCs with tiny displays are inconvenient. I’m happy to report that as Palo Alto Software developed, we strived to maintain our computers and software up-to-date at all times, especially during the crucial growth years. Tools are the foundation of productivity.
Donald Patti then goes on to tell four particular horror tales of small companies that have been harmed by a neglect to update their equipment. Losing the best programmers or the greatest clients, for example. Unsettling tales.
“Penny-wise, pound-foolish,” as my mum used to say. It’s appropriate.
(Photo credit: Flickr/Seattle Municipal Archives)
The pennies make pounds and pounds make profits is a saying that has been said to describe the importance of saving. If you are an entrepreneur, it is important to save your pennies in order to use them for something more profitable.
Frequently Asked Questions
What is meant by penny wise pound foolish?
The phrase penny wise, pound foolish means that you should be careful with your money and spend it wisely.
Is penny wise pound foolish a proverb?
Yes, it is a proverb.
- penny wise and dollar foolish
- penny wise, pound wiser
- penny wise saying