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The cost of doing business
Nise's Notes
by Denise Schoppe
The Marlin Democrat
May 25, 2005
In the late 80s/early 90s, there was commercial for, if I remember correctly, a used car lot. It was a creative play on the term, "overhead," or the expenses that occur when someone runs a business.
In the commercial, they stated that they had lowered their overhead to bring their customers lower prices. The commercial has stuck with me all these years, because the low ceiling in the man's office struck me as quite funny at that age. In other words, it was a very effective piece of advertising.
However, being as young as I was, I had no concept of what the salesmen meant by "overhead." Understanding came about as I became more active with my parent's business. I watched them struggle with insurance, utilities, the cost of renting office space, the need for office supplies, software and equipment. All this money was flowing out of the business, and they battled to get paid for their services. Not only did they need to cover the expenses, they had to make a living themselves.
Year after year, they ran into the same complaints that prices were too high. Going up a few dollars from one year to the next practically took an act of congress. However, it becomes necessary as prices go up everywhere.
When software that cost $300 one year jumps up to $500 the next, that difference has to be made up somewhere.
When gas prices rise, it costs more for shipping companies to carry packages from point A to point B. Therefore, they must go up on their charges.
To cover shipping charges rising, stores and restaurants must raise their prices. That rise in cost, must then be made up by their customers through higher charges to their clients. It goes on down the line in a domino effect.
Usually, its not out of spite or greed that prices go up, its simply the need to survive. The people doing the raising do give thought to how it'll effect their clients and patrons. However, it becomes a fight to stay in business. It's a fight to continue to offer their services and products. Without a price rise here and there, those businesses would shut down.
Now, I complain about prices going up just as much as anyone. I will never quite grasp why a glass of iced tea will cost me $2.00 at a restaurant, or why some eating establishments feel the need to now charge extra for condiments.
I do, though, understand the need to make a living, and I do understand that all things in business rely on one another.
Its frustrating. Everyone is living on a budget these days. A rise in charges in one place means adjustments in other places -- be it by businesses or individuals.
We're all in the same boat trying to stay afloat.
Nise's Notes
by Denise Schoppe
The Marlin Democrat
May 25, 2005
In the late 80s/early 90s, there was commercial for, if I remember correctly, a used car lot. It was a creative play on the term, "overhead," or the expenses that occur when someone runs a business.
In the commercial, they stated that they had lowered their overhead to bring their customers lower prices. The commercial has stuck with me all these years, because the low ceiling in the man's office struck me as quite funny at that age. In other words, it was a very effective piece of advertising.
However, being as young as I was, I had no concept of what the salesmen meant by "overhead." Understanding came about as I became more active with my parent's business. I watched them struggle with insurance, utilities, the cost of renting office space, the need for office supplies, software and equipment. All this money was flowing out of the business, and they battled to get paid for their services. Not only did they need to cover the expenses, they had to make a living themselves.
Year after year, they ran into the same complaints that prices were too high. Going up a few dollars from one year to the next practically took an act of congress. However, it becomes necessary as prices go up everywhere.
When software that cost $300 one year jumps up to $500 the next, that difference has to be made up somewhere.
When gas prices rise, it costs more for shipping companies to carry packages from point A to point B. Therefore, they must go up on their charges.
To cover shipping charges rising, stores and restaurants must raise their prices. That rise in cost, must then be made up by their customers through higher charges to their clients. It goes on down the line in a domino effect.
Usually, its not out of spite or greed that prices go up, its simply the need to survive. The people doing the raising do give thought to how it'll effect their clients and patrons. However, it becomes a fight to stay in business. It's a fight to continue to offer their services and products. Without a price rise here and there, those businesses would shut down.
Now, I complain about prices going up just as much as anyone. I will never quite grasp why a glass of iced tea will cost me $2.00 at a restaurant, or why some eating establishments feel the need to now charge extra for condiments.
I do, though, understand the need to make a living, and I do understand that all things in business rely on one another.
Its frustrating. Everyone is living on a budget these days. A rise in charges in one place means adjustments in other places -- be it by businesses or individuals.
We're all in the same boat trying to stay afloat.
