Control your Cost

Over the last 30 years I probably have gone over hundreds of business books. One advice that you normally won’t read in a lot of business books which is probably one of the more basic ones is to control your cost.  It is not sexy advice, and unlikely something that will sell books, or challenges the imagination.

In my business, I would say that our focus on controlling cost was one of the factors that enabled us to win over the competition. When you are in an industry with razor thin margins, which is pretty much almost prevalent in almost all industry nowadays, the way to win is to control cost.  A company that controls its cost well, and passes it to customers ( like Walmart, or Amazon) can well win a customer for a long time.

As a businessman, know that you cannot control the market, but you can control your cost. Understand how to put that under the control, and if you can do that better than the competition, then the profits should take care of themselves.  In fact, i would be so bold to surmise that more than half of the companies fail, not because they don’t have customers, but they could not control their expenses properly, and therefore either run out of cash, or become uncompetitive because they could not match competitors’ cost structure, and therefore their prices.

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