Cost Drivers And Profit Drivers
If you have cost drivers, you’re doing it wrong. When considering whether to accept a marginal cost, it’s only a sustainable business choice if it creates a larger marginal profit. The marginal profit might be paid off instantly, or in several years, but for it to be a sustainable business choice, it definitely has to pay off. This isn’t just sometimes-true. It’s always true. The ONLY time it’s a good idea for a business to take on a marginal cost, is in expectation of a larger marginal profit as a result....