Expect The Unexpected – Know Your Costs

Aug 24, 2015

I saw this adorable video on TV and now, it can be found all over the Internet. I wanted to find a way to share it, not just because I’m an animal lover, but because it relates to costing.

Have you ever been in a situation where you feel like your hands are tied? No matter what you do the end result will still be the same. This family had to remain inside while watching these adorable, yet destructive bears playing in their swimming pool. It was inevitable that the pool was going to be destroyed. I hope you are not faced with an actual life or death situation, but you may be faced with the life or death of your business.

What if a supplier raises prices or significantly decreases order quantity? Are you equipped to handle such changes? Being able to take necessary steps to ensure the continuity of your business is critical. Hopefully, you are not like this family and are forced to sit back. However, sometimes circumstances presented leave you unable to take action. In such instances, the more prepared you are to deal with the unknown, the more likely you are to survive.

Knowing your costs and how they are derived are essential. If you have a business back-up plan and know what is needed to recover from an unforeseen change, then once it occurs, you can act quickly. If it takes 30 days or more to see the effect of a change, you may have already used a big portion of your line to survive and may end up laying people off or going out of business.

Expect the unexpected and know your costs so you can survive!

Categories: Cost Accounting