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Three Methods To Help You Keep track of Business Finances

Strategy Driven

Look At Fixed Costs And Changing Ones. Every business has fixed costs and variable costs. What will cost you the same amount every time? Sit down and think about these differences right now, and write down any costs you can think of. Most of the time, these costs can overlap in some places.

Finance 106
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Winning Now, Winning Later: Playing the Infinite Game

Leading Blog

The problem was that he had to deliver something in the short-term to the investors for survival but had to set the company up for tomorrow too. Short- and long-term goals were more tightly intertwined than they appeared. Grow while keeping fixed costs constant. He did both. It is a process.

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The Challenges GM Is Facing, and the Reasoning Behind Its Plant Closures

Harvard Business Review

Capital-intensive factories have a high-fixed-cost, low-variable-cost operating model. If you greatly reduce the production volume, the cars that do come out have to absorb more of the fixed costs, and that eventually sends the product into a profitability death spiral. Given the shift in immediate U.S.

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We Can’t Study Short-Termism Without the Right Metrics

Harvard Business Review

The McKinsey Global Institute, in conjunction with FCLT Global, recently released research stating that long-term-oriented companies perform better than those that focus on short-term results. Getting the measurement right is central to providing convincing evidence on the debate over short-termism.

EPS 8
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Five Ways to Retain Employees Forever

Harvard Business Review

Clearly, for employees to safely make a long-term commitment to an organization, the employer will need to give them good reason to stay. It is important to remember that a long-term commitment requires effort in both directions. Tie a part of your employees' wages to the company's performance.

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Why HR Really Does Add Value

Harvard Business Review

Within the first year of our effort net sales increased 27 percent while fixed costs were reduced by 40 percent. Not all fixed cost reductions were people. We have also started to lay out a long-term development process for our HR associates to teach them everything from financial basics to strategic workforce planning.

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The Get-Big-Quick Fallacy

Harvard Business Review

If you are inside a big company, profit-draining ventures are typically early sacrifices in corporate cost-cutting exercises. There''s a term in the psychology literature for this — the availability heuristic. Growth is great, but profits are more convincing proof of long-term viability.