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I’m sure you have seen those displays of dominoes lined up, twisting and turning along a path in a large area such as a gymnasium. Once the dominoes are all lined up, one is flicked in a downward motion that sets off a continuous collapse of each domino in succession until all have fallen.
I bring this vision to mind because everything we do in life has a domino effect — look at your personal and business lives.
The one difference between dominoes and real life is that with the domino display, success comes when the last domino falls. In real life, success comes when our personal lives are enjoyed, and our business lives have fulfilled the purpose for which business exists: to bring more money into the business than it costs to run it.
Many domino path designs exist; some will lead to success, while others are doomed to failure.
Let’s examine some current events that have caused a domino effect in your personal and business lives.
The propagation of climate change caused by human behavior has pointed blame at industries that allow us to live the lives we enjoy. The cause is blamed on fossil fuels. Is that indeed true?
I’m not a scientist. I am a person who thinks logically. Science is based on the ability to observe certain occurrences in determining the truth about anything. In other words, thinking logically.
The Earth has been through five ice ages. That must also mean it has gone through warming periods. If that weren’t true, we wouldn’t need cooling systems during the heat of summer. Logic, therefore, dictates that climate change is a natural occurrence.
However, the thought that it is brought about by my human behavior may or may not be true. You can choose to believe either. However, if you believe that human behavior is the cause of climate change and you decide to do something about it, you might or might not be doing the right thing.
Fossil Fuels Debate
Let’s look at the attack on fossil fuel usage. In the United States, we have gone from being self-sufficient producers of oil and gas many decades ago to dependent upon other countries to supply us with energy to fulfill our needs.
Then, we once again began producing our own energy with the ability to supply other countries. However, we are now back to dependence on other countries supplying us with energy.
This position was put into place Jan. 20, 2021, when our ability to be energy self-sufficient was curtailed by governmental intentions of fighting the fossil-fuel industry by implementing an intent to be free of fossil-fuel usage.
The domino effect caused inflationary results for U.S. citizens and the world. After all, when supply diminishes and demand stays the same or increases, prices for any item increase.
And when fuel costs more, the cost to transport items increases, making the prices rise.
With COVID-19 pandemic checks and the spending shift from services to goods, inflation rose from under 2 percent to more than 7 percent. In turn, the prices of everything you purchase for work and home increased. At press time, the inflation rate was between 3 and 4 percent.
The domino effect doesn’t stop there. The fight against fossil fuels has its proponents hawking the benefits of electric vehicles. However, they are neglecting to see certain factors.
First, 60 to 80 percent of the U.S. electric supply is generated by fossil fuels. And, even if that were not true, the current electrical grid could not handle the demand if all vehicles were electric.
Second, the tree huggers who claim that electric vehicles are more ecologically beneficial to our planet do not consider the impact that mining for the minerals needed for the batteries and disposal of old batteries has on our planet.
Third, said minerals are found in other countries, and the geopolitical ramifications would continue to put the United States at the mercy of foreign powers.
Low Morale, Reduced Revenue
You may wonder how these domino paths impose upon your personal and business lives.
As a contractor, I am sure you realize that you incur business expenses because you must come up with the money to pay those business costs. When inflation rises, your business costs and problems rise, too.
Your staff needs to live their lives, yet they have a more difficult time enjoying their lives than they did three years ago. This fact tends to diminish morale within your business. So, you must pay your staff more or chance the possibility of lower morale affecting your revenue flow.
Increasing compensation comes with the added expense increases associated with the ancillary costs related to payroll. However, if you don’t increase compensation, you jeopardize your ability to retain employees who will help you build your business.
The next domino effect is how much your other business expenses will rise.
Vehicles are a necessary expense that not only incurs the cost and financing of them but also the associated vehicular expenses: insurance, registration and inspection, and repairs and maintenance costs. These will all increase whether your service vans run on fossil fuels or electricity.
Insurance costs are not covered under those associated with salary-related expenses, and those related to vehicles will also increase.
A myriad of business expenses are associated with shops and offices: sales promotion, communication, professional services, customer relations, tools, licenses, continuing education, bank charges and the unforeseen items that businesses incur daily.
Once you have properly calculated all your true tangible and intangible business expenses, you must consider the effects that business expense increases have on your bottom line.
If you still can make a profit above your true operational business costs, even if those profits are less than what you enjoyed prior to the domino effect, you must decide whether the profit meets your business goals.
If you don’t make a profit above your true operational business costs, you must consider whether to increase your selling prices or face eventual business failure.
In raising your prices, you will most assuredly be influenced by your thoughts on the public opinion of your new prices.
My advice to you is to remember that two plus two only equals four: it equals no less or no more. It is imperative that your true costs should be calculated in a financially prudent manner. Once that is done, you must remember that if consumers don’t pay for the legitimate business expenses you incur, then you pay for them.
And that’s an example of how the domino effect affects your business.