We all know the Ebenezer Scrooge story, and In business, we also know you can’t have a wonderful life without wonderful profit. So this Holiday I thought I would merge the two stories into a story of the greedy Scrooge in every Business. A Scrooge named Out of Control Cost.
Mr. Out of Control Cost has been plaguing Business Revenues since the birth of the P&L. Yes, Out of Control Cost has always attempted to consume all, Business Revenues good intentions. Business Revenue is growing ever frustrated with Out of Control Cost. Business Revenue fears it will soon be covered by an unbalanced sheet and has decided to give up and jump off, The Float Loan Bridge into the River of Debt.
Stop don’t jump in!! is heard through the fog by Business Revenue as it prepares to jump.
Soon appearing before Business Revenue is the spirit of Controlling Cost. Yes, Controlling Cost was once so important to Business Revenue it came before everything in Business Revenue’s life, and now it was here to save him. As Business Revenue began to remember the days when Controlling Cost was in Control, Business Revenue began to feel the weight of despair lift.
The spirit of Controlling Cost, Reminded Business Revenue of the times when Business Revenue’s children EBITDA, were fed plenty of profit, always had a home, always had the means to enjoy the things all healthy EBITDA’s enjoyed. Back when EBITDA’s were a two-digit number and the first digit was at least a two. Oh, Business Revenue began to recognize how much he missed Controlling Cost. Business Revenue began to beg; please come back Controlling Cost. Come back and help me destroy the Scrooge called Out of Control Cost. Business Revenue was again excited for his children EBITDA he knew with the return of Controlling Cost they would again prosper as once before. Before the Scrooge called Out of Control Cost took over all the good proforma intentions, Business Revenues always had and buried them in the graveyard of losses.
Business Revenue pleaded with Controlling Cost to leave the spirit world and return to the physical world. Controlling Cost simply looked at Business Revenue and said she had never left she was simply hiding behind miss management. She said to Business Revenue with discipline, and passion for building a profitable business, with a willingness to come second to Controlling Cost, Business Revenue could easily outrun the Scrooge, Out of Control Cost. She said when you focus on feeding the growth of your EBITDA, your Business Revenue growth is so much more rewarding. It was right then that Business Revenue knew he was the luckiest man in town.
Business Revenue was so relieved and excited to start the new year he knew things would return to the glory days of respectable profitability.
Shortly after the return of Controlling Cost when a salesperson rang the bell signifying a sale, you could hear Business Revenue’s Teacher say.” EBITDA gets fed every time you hear the bell.
Enjoyed this. One of my bosses uses EBITDA . First time I have seen it in print.
High revenue conceals many out of control costs and areas of waste. Eventually, revenue takes a dip due to an economic downturn, or any one of many other causes and then the waste shows itself in red ink. Cost controls should never be ignored or let down, high revenue notwithstanding.