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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Paul Smith who wrote (155301)	1/29/2011 6:28:04 PM
From: Mary Cluney	Respond to of 542832

<<<As long as revenue exceeds costs, all is fine. There is trouble when costs exceed revenue for more than a short period.>>> Cost cutting alone does not increase revenue. Even if you have a successful existing business, cost cutting can increase profits for a short period of time. After which business will decline and you will go out of business if you do not invest to at least maintain your business. For large and medium size businesses they have to continuously innovate, hire good people, and develop marketing and sales strategies. Even for mom and pop businesses they have to at least match up to competition that opens up across the street. If you don't meet the challenge, you go out of business. Even if you operate out of your bedroom, you have to invest in supplies and communications cabilities before anyone gives you business. Even in your own bedroom, and if you don't have the cash, you will have to put in some sweat equity (or money you lend to yourself) to exist. Cost cutting is not going to get you any business. Something does not come out of nothing. Business is all about return on investment. Vodoo is not going to cut it.

To: Paul Smith who wrote (155301)	1/29/2011 8:10:23 PM
From: Cogito	Read Replies (1) \| Respond to of 542832

>>As long as revenue exceeds costs, all is fine. There is trouble when costs exceed revenue for more than a short period.<< That applies only after the business has become a going concern. Most businesses don't turn a profit for the first couple of years, so virtually all successful companies started out with extended periods of lower revenues than costs. I think what this tells us is that things are not as simple as you're presenting them to be. Sometimes, you have to spend money to make money.