THE ECONOMY

Can you afford what you're spending on …

HOUSING, TRANSPORTATION, FOOD?

Most who write on the Economy attempt to provide:

Reasons why it’s too high;

Reasons why it’s too low;

Ways to change the current trends.

Some merely complain of what they don’t like and most politicians blame other politicians.

We would like to suggest that this thing called The Economy should be the prudent managing of resources to avoid extravagant expenditures or waste. That is an idealistic approach. In our society today, it will never happen.

Our free enterprise system should give companies and entrepreneurs the freedom to trade and make profits without government controls. That system governs the production and consumption of goods and services of a community based on “market demand”. If regarded as a whole, it is “the economy”. Enough philosophy!!!

We experience constant change all through life. If we are astute enough, we will, through proper management, be versatile and our business will thrive in all situations. It all boils down to managing the risk of change.

We’ll just visit one of the current problems; the cost of oil. This results in higher fuel prices for our homes and autos, not to mention the transportation of all goods and services. The latter affects all our life, private and business.

There is not much you and I can do about the cost, so how do we manage the risk? The only prudent approach is to achieve the same end without paying the imposed exorbitant cost, otherwise, we must raise our prices of product and/or service to the consumer.

Let’s explore how we might maintain the present sales cost of our item. Some of the ways are:

Buying goods in larger quantities (bulk) to decrease escalation of transportation cost;

Offer product/service to the consumer in larger quantities;

Investigate alternate or local sources of supply for our goods;

Consider which products/services could be substituted at a lesser cost;

Minimize the variety of products/services offered;

Vary advertising media to reach new markets;

Offer specials in conjunction with multiple items purchased.

The approaches are limited only by your imagination. All solutions, however, must be governed by the maintenance of quality and service to the consumer. If we lower the standards of ingredients or service, we are cheating the customer! In the long haul, when we cheat, we fail! I might add, if we market using this method, we should fail!

While the cost of oil is one of the most all encompassing, there are so many other factors that affect our business. The prudent Manager will administer resources to avoid extravagant expenditures and/or waste. By reducing those expenditures, financial savings will be realized and the company will be in position to offer product and service on a more competitive basis.