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Bill Clinton’s colorful advisor, James Carville, coined a phrase in 1992 to focus his candidate and staff: “It’s the economy, stupid!”
Every business must stay focused, not on the economy, but on its own unit economic model. How is each product priced? What does it cost to make one? What are the required fixed costs?
Whether producing cheeseburgers, hats, advice or airplane rides, one must understand and track the unit revenues and costs and know how many units must be sold to cover fixed costs.
Discipline in this is critical for meeting profitability targets. Remember, “it’s the economic model, stupid.”
– Kip Caffey, Cary Street Partners