Can we really reduce the cost of doing business?
For any business to exist, there are costs involved. Some are fixed costs, such as a lease, salaries, internet etc. While some are variable. Which are incurred only if we run the business? Example raw material, fuel, electricity etc. Though some of these may be required in minimum quantities whether we run the business or not.
If we closely observe, there is only up to certain limits where we can bring down the cost of running a business. In other words, there is a limit to the efficiencies. Let’s say usage of fuel or lubricants. Using less than required may actually end up costing much more for the business in terms of damages or losses.
However, there is another way to bring down the cost of running a Business. It’s by improving productivity. Let’s say an employee is producing $1000 worth of material a day. His cost (for calculation purpose only) is $100 per day. Whether he works or not, he has to be paid $100 every day. Which means the cost, in this case, is 10%.
Let’s say if we can somehow enable the employee to produce $2000 per day. Of course without him having to work overtime, or physically exerting more. Then the cost comes down to 5%. Though in real life it is not as simplistic, this example is used to communicate a message.
Now how can you bring down your cost of doing Business? Try CashOS.
Founder & CEO
Written on 22nd November 2018