Cost of Doing Business

When I was a young draughtsman, sometimes the boss would have us do some drawings while at the same time complaining that he wasn’t getting paid for it. “Don’t spend any time on it,” he’d say. When I asked him why he did extra work for nothing, he just shrugged, “Cost of doing business!”

Cost of doing business is an elastic concept. From an accounting standpoint it is a simple consideration of fixed costs – rent, insurance, wages – and variable costs, such as raw materials and marketing. But businessmen often wryly ascribe anything from favors that keep the client happy to well-publicized charitable donations or even to bribes as the, “cost of doing business.”

TalkingPointsMemo carried an AP report about the building collapse near Dhaka, Bangladesh. AP is ornery about quotes, so I found, Bangladesh Dhaka building collapse leaves 80 dead, on BBC:

Building collapses are common in Bangladesh where many multi-storey blocks are built in violation of rules.

A doctor from Mauritius once wanted me to design a building for him. He bragged that back home they built with concrete instead of gypsum board. But when I spoke about getting an engineer to design the concrete, he complained that back home, they just used unskilled laborers, and threw in coat hangers or any strips of metal they could find to hold it together. He said it worked out fine. I decided it was prudent not to take that commission.

It is not yet clear what caused the collapse, but local media reports said a crack was detected in the block on Tuesday.

One worker rescued from the building told the BBC that factory owners had told workers on Wednesday morning “not to worry” and that “they said they had examined the crack”.

As the AP noted, the factory was making clothes for Disney, WalMart, etc., so one could consider the collapse as a regrettable cost of doing business for the Dhaka textile companies, for American retailers and even for those of us that are happy to find cheap clothing.

A letter to the SacBee, Explosion shows cost of doing business in Texas, shows that someone else is thinking along those lines:

… I put my faith in health and safety regulations and oversight that would ensure safe storage, handling procedures, emergency and safety procedures, and accurate records of large amounts of explosive fertilizer chemicals. My sympathy goes out to the survivors in West, Tex. They know the hidden costs of business as usual, Rick Perry style.

Oil companies certainly see spills of crude oil or dilbit as a cost of doing business, and by extension all of us who drive accept that. The NRA clearly sees the the occasional Newtown shooting as just a cost of doing business for the firearms industry, and all of us who rave about the second amendment accept that. Our government was probably surprised by the Boston Marathon bombing, an unexpected cost of running a global economic empire, but by-and-large, most people will rage about terrorism but accept that, too.

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One response to “Cost of Doing Business”

  1. saywhatumean2say says :

    Being an erstwhile itenerant bookkeeper, I can not accept the building collaspe as “the cost of doing business” my costs of doing business are, as you said the fixed costs. However do understand it is the awful phrase “the cost of doing business as usual” AND I don’t like it. When the cost of doing business as usual results in the West TX tragedy and other tragedies like it; the cost is too high. dru

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