I once read that an organisation will always try to spend more than it makes. In several decades of working in Central and South West London I’ve found this to be true.
It happens because the business needs another van, or the office needs a faster photocopier or more pay for the receptionist. It happens because all these are needed things and will of course help the business to deliver better service. It happens most insidiously when the business buys into weekly commitments like better premises with higher rent or leases a better water cooler, and little by little with all the purchases being useful, sensible and even necessary, the business finds itself spending more than it makes.
An organisation will not have a surplus unless the person controlling the finances is ignoring requests for “essentials” so as to ensure income greater than outgo.
If this isn’t real then start a small business on small overheads and watch those overheads grow and grow almost all by themselves until outgo exceeds income.
I write this for the attention of small business, because they perhaps might listen. The same rule applies to large businesses and governments, but they won’t listen. In fact if any small business acted like a government financially they would soon be bankrupt, if not imprisoned.
A small business can be a beautiful thing. Small business are the backbone of our economy. Even more than that, they ARE the economy.
In 2017, of the 5.7 million businesse in the UK, 5.5 million or 96% employed under 10 people. We are indeed a proud nation of shopkeepers.
That an organisation will always try to spend more than it makes, is more than a rule, it is a natural law, and only insensitivity to all those reasonable demands for more facilities will allow the creation of a viable business to occur. Then when the money has been made, delivery facilities can be gotten, but beware those insidious monthly commitments.
Good Luck
Joe