For-profit
businesses have a simple task – make profit. Well, maybe not that simple to attain,
but simply put for a business to make profit all it needs to do is to generate
revenues that are greater than its expenses (and if the business is interested
in sustaining the profit making, it needs to ensure that it grows, and therefore
that its revenues grow faster than its expenses).
The nature
of these two forces is quite interesting, and one of the characteristics they
have is absolutely opposite. While revenues generation is subject to high
uncertainty and somewhat out of the business control, cost is highly certain and
almost fully under the business control. This core difference leads to a fundamental
difference in the way management treats the two; we hope for revenues and we ache
costs.
