Cost Control in an Emerging Business

What return can be achieved from a new company if it succeeds? And how much investment can be justified? Investments are needed to ensure business growth. This money is invested with the expectation of future profits, so these costs will not be justified soon. How can the amount of investment be managed while controlling costs? First, maintain a separate budget for these expenses. I call this the opportunity budget. From this follows the second rule: think about what results we expect from these investments in the future and when. The best example I know is Citibank, which became the most successful multinational bank in the world in the 1970s. First and foremost, Citibank's management thought about how much investment in a new venture could be justified and what minimum results could and should be achieved in the new territory. Citibank considered what field of activity is expected in the new country if they succeed and become market leaders. How much investment can be justified based on the principle that their amount should not exceed a certain percentage of the potential result? Moreover, Citibank knew from experience when the new venture would break even and start generating profit. TIP OF THE DAY: Create separate budgets for investments and expenses. Try to more accurately estimate the most likely outcomes. Track the results and adjust expectations accordingly.