Business: Bottom Line Is Usually Below You

Dewey Defeats Truman? Appearances Can Be Deceiving

Famously incorrect headline of Nov. 3, 1948 -- Chicago Daily Tribune
Famously incorrect headline of Nov. 3, 1948 -- Chicago Daily Tribune

Poll: Profits Flying Off the Chart

You hear it said most often in connection with businesses and budgets: The idea may be good, but you've got to look at the bottom line.

The world of business is proficient at coming up with pithy little adages that seem to justify whatever it is they want to do: "Business is business," "The customer is always right," "What's good for General Motors is good for the country."

But if you're reading the bottom line you'd better be attentive. It's not always what the bottom line shows that counts; sometimes it's what the bottom line doesn't show.

Polls Scientifically Accurate

Take polls for instance: polls these days are very scientific. They are taken under precise mathematical formulas that take into account all of the variables and, if the formula is faithfully followed, you come up with a margin of error of just a few percentage points.

Faithfully following the mathematical formula, however, is not always easy, and can be expensive. It takes purpose, skill and determination to put the numbers together without straying from the goal of achieving truly random numbers.

Interpreting Polls Vital to Success

Even if the poll is successful, the correct interpretation of its results is essential. Often, the simple results of polls are widely misinterpreted, and can sometimes lead to disastrous consequences.

We're probably most familiar with political polls which find one candidate or another as the "favorite" in the upcoming election. But, while pollsters are usually careful to point out that the results merely show a single point of time, the public often takes the results to heart -- and may even be swayed to vote for the candidate who appears to be most popular.

Led Down the Primrose Path

Similarly, the consumer who looks at the "bottom line" when buying cheaper napkins or an off-brand of ketchup may be led down the primrose path.

A restaurant owner, or chef, who uses inferior products to save "on the bottom line" is in the same soup.

Such decisions are usually, if not always, shortsighted.

When the napkins fail to do the job they're designed to do, and when the cheaper ketchup ruins a fine dinner, the so-called bottom line savings loses its luster.

Looking for a Scapegoat

And when the restaurant owner begins to see more and more empty tables, he may rethink that bottom line savings; unfortunately, he often doesn't like to admit his error and looks instead for a convenient scapegoat.

Offsetting the adages of business are the laws of finance and physics. For instance, the economic law of supply and demand that keeps our financial markets on an even keel, and the laws of physics that say for every action there is a corresponding and equal reaction -- and the old standby of the stock market: What goes up must come down.

The next time you're tempted to look at the bottom line, give the idea a second thought. Don't forget to take into account the subtle, but often critical, affects of any variation in the bottom line.

Take your eyes off the bottom line and look up and smell the roses. Don't take the low road, take the high road.

Lift your sights a little higher; you may find the bottom line is, as it should be, below you.

I wrote this column as a "My View" for The Hour newspaper of Norwalk, Conn., on April 6, 1996. I now write my views on a wide variety of topics on HubPages. To view my HubPages Profile Click Here

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Comments 16 comments

audro profile image

audro 8 years ago from USA

Hear hear! I have certainly made the bottom line mistake once or twice as a business owner, it seems good at first but never works in the long run. If you take something away you need to cover the hole.


William F. Torpey profile image

William F. Torpey 8 years ago from South Valley Stream, N.Y. Author

Thanks for your comment, audro. I hope you're doing a slam-bang business now!


IĆ°unn 8 years ago

bravo.

I just went on and on about short-sightedness in my econ hub. it's a pet peeve and one of the major problems with our economy right now, not just in a small business sense, and for the same reasons.

excellent hub.


Marisa Wright profile image

Marisa Wright 8 years ago from Sydney

Good points. Part of my job is procurement, and I'm surprised how many businesses have a purchasing policy that says "always accept the cheapest quote". In my experience, if you get several quotes, the cheapest is usually the cheapest for a reason - they're cutting corners or selling an inferior product.

The other place where focus on the bottom line is misleading is the trend to cut staff to save salaries, without looking at whether that will reduce customer service and therefore reduce business.


William F. Torpey profile image

William F. Torpey 8 years ago from South Valley Stream, N.Y. Author

Iðunn and Marisa, thanks for the nice comments.


compu-smart profile image

compu-smart 8 years ago from London UK

The bottom line is you write top lines about so many important issues which need to be said and seen and acted upon to make life a nicer and fairer place for everyone..

Im now off to take the high road!


William F. Torpey profile image

William F. Torpey 8 years ago from South Valley Stream, N.Y. Author

You've been on the high road all along, compu-smart! Thank you.


LiamBean profile image

LiamBean 8 years ago from Los Angeles, Calilfornia

Bravo


Patty Inglish, MS profile image

Patty Inglish, MS 8 years ago from North America

I've noticed a sudden dramatic cheapning of materials used in products at the grocery store - aluminun foil as thin a mylar and ice cube trays that should be labeld "disposable." You are completely correct about considering a multitude of factors going into any "bottom line."

Thaks for the Hub!


William F. Torpey profile image

William F. Torpey 8 years ago from South Valley Stream, N.Y. Author

I think the profit motive inspires of a lot of those kinds of changes, Patty, but if business fails to understand the long term effects of their changes they may find their bottom lines to be disappointing. Too many businessmen, I believe, think they've found the easy way out -- and simply never understand why things went awry.


earnestshub profile image

earnestshub 5 years ago from Melbourne Australia

A well written and thoughtful hub on one of my favorite topics William!

The bottom line is that maintaining customer relations provides a constant and stable business. It does not pay to take profit by neglecting end users needs.


William F. Torpey profile image

William F. Torpey 5 years ago from South Valley Stream, N.Y. Author

Thank you, earnestshub. Any businessman who neglects his customers' needs is looking for big trouble.


tonymac04 profile image

tonymac04 5 years ago from South Africa

As Ken Blanchard once said, managing with one's eye on the bottom line is like playing tennis with one's eye on the scoreboard instead of the ball.

Excellent Hub, William, thanks.

Love and peace

Tony


William F. Torpey profile image

William F. Torpey 5 years ago from South Valley Stream, N.Y. Author

Ken Blanchard was a very wise man, tonymac04. And Thank You for your nice comment.


Ron Roppo 3 years ago

Confucius

One who spends more than one earns needs not a purse.


William F. Torpey profile image

William F. Torpey 3 years ago from South Valley Stream, N.Y. Author

Thanks for commenting, Ron:

"Wise are those who learn that the bottom line doesn't always have to be their top priority." -- William Arthur Ward

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