Improving Profits

There are clear ways to reduce costs if you just examine your time-wasting activities.

We’re all on the never-ending quest for improved productivity and profits. But finally, people are looking in the right direction: Profit is made by minimizing costs. Profit is the difference between what you sell it for (price) and what it took to make and sell it (cost). Price is something you have little control over. Your costs are in two categories—raw materials, which, again, you have little control over, and your added-value manufacturing costs (AVMC). By lowering your AVMC, you dramatically improve your profits.