Chief Executive

AUGUST 4, 2022

And the already significant fixed costs of adding staff are only getting steeper. In May 2022 alone, 66 tech firms laid off a collective 16,800 people, according to tech job tracker Layoffs.fyi; that was the highest number of employees to get the axe in a single month since May 2020. . This year’s 4.8

Recruitment 98

Recruitment Marketing Fixed Costs Retention 98

Harvard Business Review

JULY 2, 2014

It’s a simple calculation to determine how many units must be sold at a given price to cover one’s fixed costs. Assume she must incur a fixed cost of $25,500 to produce and sell a kite. What if we want to make an investment and increase the fixed costs? That’s the breakeven point.

Variable Costs 18

Variable Costs Fixed Costs Sales Sales 18

Monday Task Management

MARCH 15, 2022

A basic break-even analysis template should include customizable fields where you can input all the variable costs of your new venture — including fixed costs, price, volume, and other factors that could ultimately affect your net profit. This helps you figure out when you’ll break even. Image Source ).

Revenue 52

Revenue Cash Flow Variable Costs Operations 52

Harvard Business Review

OCTOBER 13, 2017

. “Contribution margin shows you the aggregate amount of revenue available after variable costs to cover fixed expenses and provide profit to the company,” Knight says. You might think of this as the portion of sales that helps to offset fixed costs. In fact, COGS includes both variable and fixed costs.

Variable Costs 15

Variable Costs Fixed Costs Revenue Sales 15

Harvard Business Review

AUGUST 16, 2011

Secondly, expecting a business to be profitable quickly forces it to keep its fixed costs low. Because a business's cost structure determines which customers it finds profitable, keeping these fixed costs low preserves strategic options for the company when it is choosing which customers to target.

Fixed Costs 22

Fixed Costs Metrics Scaling Marketing 22

UVA Darden

MAY 11, 2022

Once you add fixed costs to those wages, it gets very expensive to run a quality program with skilled providers. Child care is expensive to provide because it’s a highly regulated labor-driven service. In high-quality settings (and by most regulations), you need to have one adult for every four infants.

Education 52

Education ROI Government Fixed Costs 52

Chief Executive

JULY 25, 2022

And if we do that, we can’t help but grow revenues per fixed cost. And if we bring more customers to the site, then we can’t help but attract more third-party sellers. And if we do that, then we can’t help but expand the store and extend distribution. And if we do that, we can’t help but be able to lower prices on more stuff.

Balance Sheet 98

Balance Sheet Assets Engineering Operations 98

AIHR

JUNE 1, 2021

– Variable or fixed cost. – Direct or indirect cost. – Cost per unit. – Employee cost or FTE. . – Number of new customers or leads. – Customer satisfaction. – Number of customer complaints. – Retention. – Net Promoter Score. Work environment.

ROI 52

ROI Implementation Retention Employee Engagement 52

Harvard Business Review

MARCH 28, 2011

Variabilizing costs. Companies can lower their fixed costs and increase those that fluctuate with the market. Many vendors, who apportion fixed costs among different companies, charge on a per unit basis. One way of doing that is to outsource production.

Fixed Costs 15

Fixed Costs Scaling Marketing Manager 15

Harvard Business Review

JUNE 22, 2015

To figure total costs you first multiply the unit quantity sold by the variable costs per unit, then you add the fixed costs. Like this: Note that Price per unit – Variable costs per unit is equal to the Contribution margin per unit. The fixed costs to advertise the flip flops are $2,000.

Variable Costs 15

Variable Costs Fixed Costs Advertising ROI 15

Harvard Business Review

JULY 2, 2014

It’s a simple calculation to determine how many units must be sold at a given price to cover one’s fixed costs. Assume she must incur a fixed cost of $25,500 to produce and sell a kite. What if we want to make an investment and increase the fixed costs? That’s the breakeven point.

Variable Costs 10

Variable Costs Fixed Costs Sales Sales 10

Harvard Business Review

DECEMBER 21, 2011

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.

Fixed Costs 16

Fixed Costs Staffing Sales Sales 16

Harvard Business Review

AUGUST 11, 2011

Management has made promises to senior executives about what a project will achieve, and fixed costs have built up because they looked prudent in comparison to planned revenues.

Fixed Costs 15

Fixed Costs Travel Revenue Assets 15

Harvard Business Review

OCTOBER 29, 2015

This makes financial sense in industries with high fixed costs and low variable costs: larger sizes enable the company to charge higher prices that, even if they are just slightly larger, absorb a higher portion of fixed costs, while reducing packaging cost per volume and attracting value-minded consumers.

Fixed Costs 14

Fixed Costs Variable Costs Marketing Sales 14

Harvard Business Review

NOVEMBER 30, 2018

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.

Fixed Costs 14

Fixed Costs Assets Cash Flow Variable Costs 14

Harvard Business Review

MARCH 22, 2013

Congestion, rather than raw usage, is the key driver of this phenomenon; given that the Internet Service Provider network is largely a fixed-cost asset. Like any fixed-cost asset, such as the Interstate highway system in the U.S., it is cheap to operate and expensive to upgrade.

Fixed Costs 17

Fixed Costs Revenue Assets Scaling 17

Harvard Business Review

JULY 22, 2011

It was in your home, had no shelf space limiting its inventory, and could beat Tower on price because of its lower fixed costs. As an online storefront it had a fundamental advantage. The only thing that might have kept Tower treading water at first was its ability to be compatible with Discmen, which we know now disappeared quickly.

Fixed Costs 19

Fixed Costs Media Marketing 19

Harvard Business Review

NOVEMBER 12, 2012

By making the fixed cost of payroll inherently more variable under differing business conditions, you can make your company more resilient and agile, while also treating your employees exceptionally well. Tie a part of your employees' wages to the company's performance.

Fixed Costs 14

Fixed Costs Workflows Revenue Compensation 14

Harvard Business Review

DECEMBER 10, 2012

Regardless, a financing component adds another fixed cost. New businesses either have strong openings, such as new restaurants, which then trail off as the next hot spot grabs the limelight, or slow starts, when, hopefully, word spreads and revenues build. How long will her business survive if members sign up at half the pace?

Assets 15

Assets Fixed Costs Revenue Benefits 15

Harvard Business Review

FEBRUARY 22, 2011

As each of these companies expands its fixed-cost infrastructure, profits grow geometrically because the additional variable cost of adding each new user is near zero. Adding a profile on Facebook has little to no impact on Facebook's operating costs. Greater scale bestows greater competitive advantage.

Advertising 16

Advertising Variable Costs Scaling Media 16

Harvard Business Review

MAY 8, 2012

Bharti's innovative business model converted fixed costs in capital expenditure to a variable cost based on usage of capacity. Through the outsourcing arrangements, Bharti dramatically lowered its costs while ensuring high quality for customers, since vendors had world-class competencies in their domains.

Balance Sheet 12

Balance Sheet Variable Costs Telecommunications Fixed Costs 12

Harvard Business Review

MAY 2, 2013

The key components that lead to a solution are as follows: Understand the dynamics of a high fixed cost/low variable cost industry. While pharma companies spend billions on research, the actual cost of manufacturing a treatment (such as a pill) is minimal. This cost structure enables pricing flexibility.

Variable Costs 10

Variable Costs Fixed Costs Cash Flow Revenue 10

Harvard Business Review

DECEMBER 17, 2014

Eden McCallum, thus, manages to keep its overhead and other fixed costs at a minimum. The only thing the consultants (usually ex-McKinsey, Bain, or BCG) are responsible for is to execute these projects to the best of their abilities.

Fixed Costs 15

Fixed Costs Retention Manager Marketing 15

Harvard Business Review

JULY 20, 2011

A succession of CEOs prior to Rick Wagoner (who fought heroically to overcome the dreadful hand he was dealt) allowed all manner of legacy costs to build up (retiree health, Jobs Bank, etc.) and those largely fixed costs were more painful and debilitating if GM shrank in the U.S. — as it did — than if it grew.

Fixed Costs 14

Fixed Costs Banking Advertising Marketing 14

Harvard Business Review

MAY 19, 2015

That gave it a steadier cash flow to cover the costs of its large fixed cost investments, but did not eliminate the unused capacity of plants dedicated to one kind of product. Before, a big conglomerate like GE diversified its risks by mixing pro-cyclical and counter-cyclical businesses.

Cash Flow 15

Cash Flow Engineering Fixed Costs Sales 15

Harvard Business Review

MAY 21, 2015

The costly and complex operations of transporting energy have made utilities natural monopolies, while regulatory barriers and the high fixed costs of building and maintaining regional electrical grid infrastructure have also kept much competition at bay.

Energy 15

Energy Transportation Real Estate Software 15

Harvard Business Review

SEPTEMBER 18, 2013

These businesses have powerful disruptive potential because they can provide consulting at a fraction of the cost of traditional models, largely because they do not need to carry expensive fixed costs like recruiting, training, consultant “beach” time, and expensive real estate.

Real Estate 12

Real Estate Small Business Fixed Costs Recruitment 12

Harvard Business Review

SEPTEMBER 4, 2013

For example, a decade ago, it''s unlikely that small-business owners would have told you that they needed a flexible way to host data and applications, one that preferably turned the fixed cost of computer hardware into a variable cost of renting capacity. When the company rides an enabling trend.

Fixed Costs 8

Fixed Costs Variable Costs Assets Banking 8

Harvard Business Review

AUGUST 17, 2012

That may be true, but then the firms that do carry out the R&D are also dominant in their developed domestic markets, where their margins can absorb the fixed costs of R&D and there's nothing to stop them from competing on a cost basis in Africa, particularly given the low production costs of most drugs.

Fixed Costs 14

Fixed Costs Marketing Sales Sales 14

Harvard Business Review

MAY 9, 2013

In every part of the industry, the open innovation model is changing the economics of advertising by switching significant fixed costs to variable costs and sourcing creative from more relevant and, many times, lower cost sources.

Advertising 13

Advertising Variable Costs Media Fixed Costs 13

Harvard Business Review

OCTOBER 27, 2016

A full-time job provided the steady income needed to support our traditional version of the American Dream: the highly leveraged, high-fixed-cost house; the cars; the latest consumer goods. If you had a full-time job, you won.

Insurance 14

Insurance Reorganization Fixed Costs Benefits 14

Harvard Business Review

JUNE 4, 2015

Since theme parks are high fixed cost/low variable cost entities, revenue from discount-enticed new customers is virtually all profit… free money. By offering deeper discounts on off-peak days, customers who otherwise would not have enjoyed Disneyland could now do so. This would result in growth.

Variable Costs 12

Variable Costs Fixed Costs Implementation Travel 12

Harvard Business Review

AUGUST 8, 2014

So to cover his monthly fixed costs of student loan payments (on more than $100k in debt), rent, and health care he was driving for Uber. As a result he was now competing against much more experienced people for each new gig that came up, and he hadn’t had a lot of success since graduating.

Fixed Costs 14

Fixed Costs Project Management Education Accounts 14

Harvard Business Review

APRIL 19, 2011

Meanwhile, declines in revenue and escalating fixed costs for things like public employee pensions and health care are crippling our cities budgets. Our large metro areas now house two thirds of America's total population. They have become the dominant forces in our economy and society.

Government 14

Government Revenue Fixed Costs Software 14

Harvard Business Review

JUNE 25, 2013

The need to decentralize organizations around employees — viewing them as assets capable of expanding growth rather than as fixed costs to be eliminated — and to move away from standardized and tightly-specified process flows.

Fixed Costs 13

Fixed Costs Assets Scaling Education 13

Harvard Business Review

SEPTEMBER 9, 2015

During an economic crisis, the exaggerated decline in orders can be especially damaging to upstream suppliers that have high fixed costs tied to production assets. This phenomenon has been documented in the consumer-packaged-goods , food , semiconductor-manufacturing , and other industries.

Sales 15

Sales Sales Operations Fixed Costs 15

Harvard Business Review

OCTOBER 6, 2014

Hard discounters aim for twice the volume with the same fixed costs so they can make the same returns at half the gross margin. The company plans to double the number of outlets in the UK to 1,000 by 2022, and it won’t stop there if Aldi Germany is any indication. You might wonder how anyone can make money with such low prices.

Reorganization 15

Reorganization Fixed Costs Transportation Sales 15