

Revenues may have big numbers, but expenses may be just as big or bigger.
Operating expenses are either fixed or variable. Fixed means the cost stays the same regardless of the number of products sold, such as the cost of owning a building. Variable means each batch of items sold incurs an extra cost, such as the cost of boxes to ship the products. Be sure you include all costs when figuring out bottom-line profit.
In addition to cold cash, you may want to create a cost estimate for other “bottom lines,” such as environmental pollution, or customer, stakeholder and coworker “goodwill.” The dollar cost of recycling might be $50/month, yet the environmental benefit might be worth $300/month, and recycling might also lower turnover at your company, saving a hiring and training cost of $30,000/yr.
To get coworkers to feel the impact of a big cost, find the day-to-day cost. “Ten people are collecting unemployment? That’s costing us $500 each day! What can we do?”










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