That saying, ‘the bigger the better’. Not bad anyway but make sure to punch your calculator very accurately, sometimes big comes at a cost; more expenses. What is used more frequently becomes prone, wearing and tearing is real. There is much to talk of here; it could be the advantage one business model has over another.
For instance, heavy machines need maintenance and so also software updates occur for efficiency. Compare both and we can talk on and on about the price clause.
Or maybe I should start off from a much more understandable business area. Let's say an egg supplying farm and the wholesale buyer. How does it fit in? Our target is maintenance. So the farm will have to use a van or whatever transporting means to get the goods over while the wholesalers just offload it into his shop/store.
Let's say for the wholesaler, his retail customers will have to come themselves, of course since they are not buying in much quantity. Heading back to the farm, there is enough work, the car itself will need daily, weekly or monthly maintenance. Even if it were to be new, along the line some faults will have to be catered for.
Moving into the farm, you will find infrastructures that will over time need replacements. It could be the generator or a worn out roof.
How about things like circuit breakers and pumping machines? So we can see the wholesaler in one way or the other evading so many maintenance processes; his duty is an in-between leverage.
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Or we could talk about the real estate agent and a real estate owner. The former's duty is just to bring in clients and settle for his percentage while the latter will have to reinvest on the needful. It could be repainting the entire building after some years.
How about looking into the plumbing area, there is always enough expenses here, a leaking shank, broken pipe, toilet seat, fading tiles and you keep naming it. I keep on saying that some people who call themselves landlords may not even be in tangible profit but they don't know it.
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So how did we get here? Ok it was me just sitting down to calculate the unforeseen cost of running my brand and if I should add, how we need to step up means to bring in more cash inflow. prices of bringing in new equipment are high and it follows suit its maintenance cost. Sometimes expenses just hit your table and you try to do as if you haven't observed; trust me, not for long.
businesses that need much infrastructure and machinery face these issues. The right term here is ‘the hard industry’, it eats up more energy, demands a commanding workforce, more infrastructures, more maintenance procedures and it boils down to a poor net income return. This is why I am working on retracing some of our expansion steps; the idea is to incorporate softness into this company.
To conclude let me add, business operation cost ranges from its type. It is not surprising if you are business inclined that some smaller businesses command much more substantial profit than a bigger one.
Asides from just its profit, you can also talk of how easy it gets for such businesses to launch its flywheels and operate much more effectively. So is big better? The answer NOW is dependent on aforementioned factors or it may end up just busyness.
