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Casual Articles - Invalid Excuses for Poor Business Results - Rising costs
As a rule of thumb, dressing in a suit for an interview wouldn't do you any harm. You must be able to capture the tailored look, but in a feminine manner. Double breasted in navy or black, perhaps softened with a scarf rolled under the collar, its a classic which will never be out of style.A good idea is to find some information regarding what other people in the office wear. If you think a suit will be too formal, maybe you could consider wearing
Management guru Tom Peters says white collar workers and managers in functional departments need to protect their futures.They have to learn "the difference between doing totally acceptable work and creating very new value...." he notes, in an Industry Week article. In other words, people in departments like Human Resources and Finance need to become entrepreneurial.With that in mind, let's look at three ways you can use communication to add
For the first quarter of 2005, Northwest Airlines posted a loss of $458 million. The main reason cited was high fuel costs.
Northwest complained that fuel prices surged to $630 million from $450 million for the same time period last year. Let’s start by looking at some numbers. During the first quarter of 2004, Northwest lost $230 million. This means the increase in red ink was $118 million while fuel expenses increased $180 million. Obviously, with fuel expenses higher than the change in red ink, one could make an argument that higher crude is responsible. This argument does not hold up to scrutiny when you consider the entire cost of fuel was only $172 greater than the loss. Also Northwest has stated a penny fuel increase equates to $1.6 million in operating costs. A $458 million loss attributable to increased jet fuel cost would need to cost $2.86/gallon using Northwest calculations. At the end of the first quarter, jet fuel averaged $1.27 cents.
Okay, too many numbers, let’s look at it a different way. Based on Northwest’s total fuel bill, if fuel was the reason for the loss, the only way they could have turned a profit would have been to run their planes with only 25% of the fuel actually used. Although this would be a quick fix and return the airlines on paper, if their argument is correct, it would have had a dire effect on reaching each flight’s intended destinations.
If this isn’t convincing enough that Northwest’s blame of fuel costs is invalid, consider Southwest Airlines. The first quarter of 2005 was the airlines 56th consecutive quarter of earnings – earning $76 million dollars. Southwest, which has been able to compile a winning streak of 32 straight years of profits did not need to make excuses for their earning, despite fueling their planes sufficiently to reach their destinations. However, Southwest did comment on rising fuel prices when they released their earnings statement. Their comment, “While we are not immune to the challenging industry revenue environment and glut of capacity, we are well positioned for growth and will continue to explore long-te
Businesses small and large have been using MS Excel for years to run processes and manage projects. For small, simple projects Excel is a useful organizational tool. However, projects have a tendency to grow in complexity at a rate that Excel can not keep up with. Imagine that a business needs to track projects or processes and does have the time or budget to put a sophisticated tracking system in place. An IT department does not exist or is bus
Okay, too many numbers, let’s look at it a different way. Based on Northwest’s total fuel bill, if fuel was the reason for the loss, the only way they could have turned a profit would have been to run their planes with only 25% of the fuel actually used. Although this would be a quick fix and return the airlines on paper, if their argument is correct, it would have had a dire effect on reaching each flight’s intended destinations.
If this isn’t convincing enough that Northwest’s blame of fuel costs is invalid, consider Southwest Airlines. The first quarter of 2005 was the airlines 56th consecutive quarter of earnings – earning $76 million dollars. Southwest, which has been able to compile a winning streak of 32 straight years of profits did not need to make excuses for their earning, despite fueling their planes sufficiently to reach their destinations. However, Southwest did comment on rising fuel prices when they released their earnings statement. Their comment, “While we are not immune to the challenging industry revenue environment and glut of capacity, we are well positioned for growth and will continue to explore long-t
The overall number of physicians now seeking overseas opportunities has been on the rise, and there are many countries that always have an increasing demand for medical personnel. The reasons for physicians looking for jobs in foreign countries could be many, but primarily they are the ones looking for the opportunity to practice medicine in a culture outside of their own so that they can gain additional and unique experiences. Those who seek opportunitie
Okay, too many numbers, let’s look at it a different way. Based on Northwest’s total fuel bill, if fuel was the reason for the loss, the only way they could have turned a profit would have been to run their planes with only 25% of the fuel actually used. Although this would be a quick fix and return the airlines on paper, if their argument is correct, it would have had a dire effect on reaching each flight’s intended destinations.
If this isn’t convincing enough that Northwest’s blame of fuel costs is invalid, consider Southwest Airlines. The first quarter of 2005 was the airlines 56th consecutive quarter of earnings – earning $76 million dollars. Southwest, which has been able to compile a winning streak of 32 straight years of profits did not need to make excuses for their earning, despite fueling their planes sufficiently to reach their destinations. However, Southwest did comment on rising fuel prices when they released their earnings statement. Their comment, “While we are not immune to the challenging industry revenue environment and glut of capacity, we are well positioned for growth and will continue to explore long-t
The success of any business relies on the profit they pull in every year. To guarantee this profit is the highest it can be, appropriate financial management measures must be put into place. Controlling business costs is essential; after all you don’t want to spend thousands on a high-cost range of equipment when cheaper, simpler equipment will be just as effective. All of your business costs can be allocated to a budget, which is your guideline for just
If this isn’t convincing enough that Northwest’s blame of fuel costs is invalid, consider Southwest Airlines. The first quarter of 2005 was the airlines 56th consecutive quarter of earnings – earning $76 million dollars. Southwest, which has been able to compile a winning streak of 32 straight years of profits did not need to make excuses for their earning, despite fueling their planes sufficiently to reach their destinations. However, Southwest did comment on rising fuel prices when they released their earnings statement. Their comment, “While we are not immune to the challenging industry revenue environment and glut of capacity, we are well positioned for growth and will continue to explore long-t
Tax time always makes us reflect how what we have done. If that reflection leaves you with questions, then it is time to consider working for yourself. People who work for themselves look forward to tax time. Why? Because we plan all year to be rewarded come tax time.We have changed our lives from waiting to see what is going to happen to us, to pursuing accomplishments. During times of transition, it is not “business as usual”. If your company is
Blaming operational costs, including price increases from suppliers, is common among businesses. Entrepreneurs and Fortune 500 companies fall pray to this invalid excuse. Successful business professionals see increased costs in advance, and prepare for them. For example, Southwest Airlines has hedged their fuel expenses through 2009 in anticipation of higher prices. They said, “Excluding fuel, our unit costs declined 3.8 percent. This superb performance reflected a tremendous effort by our Employees, and they continue to work hard to improve productivity throughout our Company.”
To create consistent earning, Southwest Airlines offsets the volatile fuel prices by buying crude oil derivative contracts to limit their risk to sharp changes in jet fuel costs. This practice makes it easier to budget for fuel. Although there is not a jet-fuel derivatives market, airlines can hedge indirectly by dealing in closely related oil futures, then use the proceeds to offset the higher fuel costs.
Rather than making excuses for higher costs, look at ways to offset those higher expenses through a team attack on budget waste. If possible, prepay or set aside money to counteract those costs when they do go up. Predictable increases should be written into proposals as early as possible.
Proper planning puts you on the path of max impact, where your business will flourish despite erratic business expenses.
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