Free Effect. A new ice cream company in India has set up free ice cream vending machines on the streets to promote its brand. Result? People lined up at a very long distance in front of the vending machine. It was raining then, and the people in line went to a convenience store to buy umbrellas, then lined up again. Umbrellas cost much more than ice cream. However, people kept lining up. Cheap and free are two completely different concepts. When the price is low, sales increase slightly, but when it is free, an extraordinary dimension of the problem arises. It’s a privilege, so consumers are willing to pay a higher price to get something for free. Free is not a matter of reason; it is a matter of emotion. - Joseph’s “just my thoughts”
If you’re running multiple businesses within a single business entity or a business that generates sales by connecting with different businesses, I recommend managing the accounting for each separately. For example, if a car rental company also engages in car leasing, try to maintain distinct accounts for the rental and leasing sectors. This approach increases the chances of uncovering hidden costs or mistakes in resource allocation . In business, specific attributes necessitate this separation, leading to independent costs and improved profit structures . Neglecting this reality can result in bankruptcy without fully understanding the reasons behind it. The foundation of success is to avoid failure. - Joseph’s “just my thoughts”