If you don’t know what your cost drivers are, you aren’t managing your business. You’re just reacting to it.
You dig into the expenses. Rent is flat. Salaries are steady. But somewhere, a line item labeled “miscellaneous operating costs” has doubled. cost driver
Traditional budgets just add 5% to last year’s numbers. Driver-based budgeting asks: “If we increase sales by 20%, how many more customer service calls will that generate?” You can now predict costs before they happen. If you don’t know what your cost drivers