«The common practice of cost centre planning for businesses that resisted the economic crisis»

Everything remains well-proportioned in the universe, ranging from natural to human laws. This proportionality cannot be disturbed, so long as human behaviour stays attuned with universal laws and human creations are governed by harmony and sustainability. The same applies to entrepreneurship and enterprises.

In the universe, everything that produces, consumes energy; for every effect there is a cost. This is true for everything, from the human body, family and nature to weather phenomena and the movement of the earth. For every field of activity that produces work, effect and turnover, there should be by proportion a financial / energy cost, in other words, it should consume productive resources.

A cost centre, together with the function producing work or turnover, is made up of human, material, or simply financial resources destined for consumption. A business’ sustainability and backbone of development are dependent on regularly monitoring its cost centres and building its budget around these observations. De-harmonizing the relationship between cost and work by predetermining cost rates for the work produced, could hurt the business or the productive resources. This is a typical case of a ‘non-productive business’, since defining productivity is none other than defining a ratio, in other words, a fraction where cost is the numerator, whereas the work that is produced and its value are the denominator.

Through statistical evidence, it has been shown that regardless of size, the only businesses that were not significantly influenced by any crisis, were the ones whose planning and operations systematically depended on cost centres. These are the kind of businesses whose fast reflexes enabled them to survive the market changes with creativity and determination. Any business can directly adopt the cost centre methodology after attending a ROIEDU Business seminar, that is, an educational programme for small and medium sized business owners, which uses and applies specific tools.


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