Why I Stopped Wearing My Socks

by Alok Kejriwal

I learned the fine art of costing through this very intensive exercise. The hard work to calculate costs to their minutest levels and to then allocate them for each sock we manufactured made me adept at costing and therefore, at deciding the pricing of products. I firmly believe that every business must be broken down into the atomic details of its costs. The most critical metric entrepreneurs must know is the margin (profit) on what they sell, and that can only happen when they know their costs. I insist that entrepreneurs must understand their business costs as intimately as possible and not just rely on accountants to figure out or advise them. Costing is the lifeline of a business and must be appropriated, reviewed and actioned upon by the owner and founder directly.