How to Maximize Your Business Profits ? : Insights from Einstein's Theory of Business Relativity

Researchers formerly believed that space and time existed as distinct entities, envisioning the universe as a mere collection of cosmic entities arranged within three dimensions. Nevertheless, Einstein revolutionized this notion by introducing the concept of time as the fourth dimension, demonstrating the inseparable connection between space and time. His profound theory of relativity proposes that space-time undergoes expansion and contraction, influenced by the momentum and mass of neighboring matter.

Similarly, in business, space and time are correlated. While this is common to all kinds of businesses, it is particularly applicable to conventional brick-and-mortar businesses.

More the time More the space

In business, when you make your service delivery time faster, less space is required!

When you optimize your delivery processes for speed and efficiency, you're not just saving time; you're also minimizing the physical footprint required for operations. In other words, the more time you take to get your products or services to your customers, the more space you need.

Not clear, right? Consider a conventional gas station with three pumps; the time of delivery would be 2 to 3 minutes, allowing them to serve 1,440 vehicles a day (3 pumps x 20 vehicles per pump per hour x 24 hours). However, at electric charging stations, there are currently more than 56,000 EV charging stations with about 148,000 charging ports, averaging three ports per EV charging station. These EV stations can serve only 144 vehicles in 24 hours (as it takes half an hour to fully charge a battery, which allows 48 cars per port). This is ten times fewer than conventional gas stations. Therefore, each charging station would need ten times more ports (30 ports) to serve 1,440 vehicles in 24 hours. Having ten times more ports means it will take more space.

Fast Food vs. Fine Dining: A Space-Time Analysis

This analogy applies to restaurants as well. Fast food restaurants make the delivery time faster, allowing them to serve more customers in less time. While they do have the option of dine-in, they can serve more customers than a typical restaurant. The average size of a McDonald's is 4,000 sq. ft., while that of The Cheesecake Factory ( fine dine-in restaurant) is 5,000-6,500 sq. ft. The average number of customers who visit an individual McDonald's is 1,700 to 2,000 per day, whereas for The Cheesecake Factory, it is 1,000 to 1,200. There is a minimal gap of 700 customers more that McDonald's serves per day. This is the total average of all McDonald's, and if we just consider McDonald's in tier 1 cities, the walk-in might be higher than this.

The Digital Frontier: E-commerce and Space-Time Efficiency

The space-time concept can be used to analyze online stores and e-commerce sites as well. An easier interface and faster navigation time reduce the cloud storage and bandwidth required, enhancing both customer experience and operational efficiency. For instance, Amazon, with its user-friendly interface and efficient search algorithms, serves millions of customers each day. Its success is partly due to its streamlined user interface, which enables customers to quickly find and purchase products, minimizing the time they spend navigating the site.

In comparison, let's take Flipkart as an example. While it's one of the top e-commerce platforms in India, its user interface and navigation speed is compartively is on the down side slightly when compared to Amazon. Despite attracting a substantial number of visitors, with more than 167 million per month as of April 2024, it's evident that Amazon India, with over 292.5 million monthly visitors during the same period, outperformed Flipkart in terms of user engagement and efficiency.

Flipkart's interface may not be as intuitive or responsive as Amazon's, leading to slightly longer search times and higher bounce rates. As a result, Flipkart might require more digital "space" in terms of server storage and bandwidth to accommodate the same number of users as Amazon. By investing in improvements to its interface and user experience, Flipkart could potentially enhance its operational efficiency and better compete with Amazon in the Indian e-commerce market.

The Profit Dimension

In business, there's another crucial dimension to consider: profit. The space-time theory affects this dimension significantly. Services with shorter delivery times generally tend to have better profit margins.

For example, gas stations typically have a profit margin of 1-2%. In contrast, EV charging stations, like ChargePoint, are currently operating at a negative 50% margin. Although they are in the growth stage and might require time to break even, achieving large revenue volumes is essential for their profitability.

Similarly, the profit margin of McDonald's (30%) is much higher than that of the Cheesecake Factory (1.5%). This stark difference illustrates that faster service delivery, when managed correctly, can lead to higher profitability.

Balancing Speed and Quality

However, the question arises: should everything be fast? Not necessarily. While mass-market companies benefit from faster delivery times and seamless processes, some businesses cater to customers who value a leisurely experience.

Faster delivery should not mean compromising drastically on quality. It's about reducing time by improving business processes while maintaining consistent quality. For new businesses aiming to price their products in the affordable segment, designing processes to ensure faster delivery times is crucial.

The Space-Time Continuum in Business

Just as Einstein's theory of relativity reshaped our understanding of the universe, the concept of space-time efficiency can help in desgining business operations. By optimizing delivery times and making efficient use of space, businesses can serve more customers, increase sales, and maximize profits.

The space-time continuum in business is not a one-size-fits-all solution. It's a strategic tool that, when used wisely, can propel a business towards greater efficiency and profitability.

In the world of business, as in the universe, space and time are indeed intertwined. Mastering their relationship is the key to unlocking any business's potential.