What Are Cost Drivers ((full)) -

And she put up a small sign: No card for orders under $5. That eliminated fifty tiny transactions a week, saving $15 in swipe fees.

So she changed things.

"Mariana," Leo said, tapping a graph. "You think flour is your biggest problem. But look closer." what are cost drivers

She merged delivery routes so the van made 12 stops instead of 18, saving $45 a week in fuel.

Don't just look at what you spend. Look at what activity makes you spend it . That activity is your cost driver. Manage the driver, and the cost follows. And she put up a small sign: No card for orders under $5

"A cost driver," Leo said, "isn't just a cost. It’s the activity that makes the cost appear. It’s the engine. The gas pedal."

Then Leo explained the secret language of business. She called them . "Mariana," Leo said, tapping a graph

"That's the heat," Mariana sighed. "The air conditioner."