If you’re in business you’ve heard the saying
‘That’s just the cost of doing business’

If you follow some of my writing, then you know I’ve moved away from the concept of ‘spending time’ towards viewing all time as invested. All of it.
The ROI varies for sure.

When it comes to dollars, I’m applying the same logic.

I don’t have expenses, I don’t have costs. I have investments.
Again, the ROI varies.

Yet this is standard figure of speech in business; ‘the cost of doing business’ and it’s typically referring to a line item in your financials that you don’t like.

I’ve never agreed with this statement, especially not since it was uttered by a young staffer decades ago that had just made a $900.00 assembly error in missing four 15 cent plastic bits. I recall trying to explain to him that I don’t have costs. Not in business, not in life.

I have investments.
I don’t cut costs.
You don’t cut costs.
I stop investing.
You stop investing.

I didn’t cut that staffer, not that day. I instead looked that that mistake, and it’s ‘cost’, as an investment. I was making a $900.00 investment in him.

Over time I like to think it paid off, even though he eventually departed. An experience which offered me yet another opportunity to make investments in tolerance, patience, and ultimately a new staff member.
All investments (aka costs); be they time, money, energy, people, have a return of some kind.

Return On Investment (ROI)
And based on the ROI we choose to invest more of, the same, or less of.

There’s talk around boardroom tables, and around kitchen tables, the world over of ‘cutting costs’.
We would all do well to keep in mind that’s not exactly what’s being done. We are cutting an investment of some kind.

An important distinction to make.
An important mindset to maintain.

Ask more questions.
Invest time thinking on the answers.

How is this cost an investment?
What is the return on the investment?
Is this investment easy to exit?
Is there a penalty due, a severance payout, for instance?
Is this investment easy to re-engage?
Is replacing staff easy?
Is retraining staff easy?

Don’t simply review the right-hand side of an income statement looking for big numbers to ‘cut’.

Instead review each and every line item from an investment perspective and think the ROI through.

Completely.

DW