Importance of Project Management for Small Businesses
Frequently, businesses are founded based on your expertise in the industry, not how well you can run a business, but this approach to business is flawed. All businesses need a plan to stay operational. Sometimes, this plan is only in managements head, or it is stored in a document somewhere around the office. When you make a plan to run a business, here is what you need to know.
Project management is a set of goals for the company to achieve, and each goal is a project. To work towards that businesses success, it must continue towards these goals. These goals may be to complete a contract job that has recently been offered, or it may be filling out an application for a business loan to facilitate business wide growth.
Why is Project Management Important to Small Businesses?
Project management provides businesses with a game plan for tackling their problems. You are going to need a project management plan in order to succeed as a business.
If you started off as an expert, that is a great accomplishment; however, you are still going to need to utilize project management. You may have an idea of how to do everything, but you are still going to need to materialize that plan into action. It will also help your employees and management team visualize and work towards the plan of action.
Project management is not going to diminish your business capital. You can choose from many free to low-cost solutions for project management, but you will definitely lose capital if you do not utilize the management skills.
And then, there is the argument that plans will slow down a business’s course of action. This could not be further from the truth. When establishing your next marketing campaign, would it not be easier to jump from step to step, instead of thinking about what to do next? Project management lays out all of the steps for you to make the jump to the next level. You know what you are going to do before you have to do it.
To start using project management may require more time, but you will be able to ensure a quality job is finished at the end of each day. Would you rather have the job done right or the job done fast and wrong? You probably want the job done correctly.
Summary
All small businesses need to use a project management plan. It is among the top reasons businesses do not succeed on their startup. Failure to plan is almost as detrimental as a failure to act. To ensure success, make sure you have a project management plan in place for your long-term success. It also can’t hurt to pursue more education and information from an online mba program.
Raising Awareness About Healthy Habits in Your Neighborhood
It is important to keep your neighborhood and community healthy. You can raise awareness about healthy habits by sharing them with your neighborhood. You will help each person feel healthier and promote the good of the community. Have meetings or hand out community newsletters to help raise awareness to promote health. It is also a good idea to brush up on health policy programs to come up with some new ideas on living a healthy lifestyle.
Plant A Garden
Gardening will not only make your neighborhood look great, but will enhance healthy habits. Gardening brings you fruits, vegetables and beautiful flowers. It is also a great way to promote the healthy habit of exercise. Gardening burns more calories an hour than aerobics, and you work many different muscle groups. This will also help you reduce stress as you dig and connect with nature.
Yard Work
Not only does yard work help lower your stress and burn calories, the community benefits as a whole. Yard work increases the beauty of your yard and puts a spotlight on nature. It is a healthy habit because it gets you moving and working those muscles you forgot about. You can mow, rake or weed eat for a quick exercise.
Working Out In Nature
Get a community walking or jogging group together so you can promote the healthy habit of exercise. You could even hold a yoga or aerobic class if you have proper instructors. Jog or walk through the community getting to know one another and sharing your fitness tips with each other along the way.
Turn Off the TV
At night or on the weekends you can probably peek through the windows to see your neighbors perched in front of their television. A little television is okay, but encourage neighbors to turn off the TV and put their minds into action. Play an outside game of touch football with the family or set out a board game when it is cold outside. Read a book to entice the mind and get your eyes away from the bustle of the TV.
Host A Party with Good Eats
Bring together your neighbors to raise awareness for their health with a get together. Getting the neighbors together around healthy eats and treats will help them learn healthy habits. Cook healthy foods and make healthy drinks. So many people incorporate parties with pigging out and indulging in alcohol. Show your neighbors the neighborhood parties can be filled with fun without all the calories that will only make yourself feel bad the next day.
Play Dates
When the warm weather comes, get the kids out with other kids in the community. Play outside or go to a local park. This will not only get them moving and interacting, but will help you meet other neighbors and lower your blood pressure by having a little fun. Older kids can get out riding their bikes and playing sports with the other kids in the neighborhood. Encourage kids to turn off the video games and television and get outside to enjoy the fresh air.
Go Green
One healthy habit that will help your neighborhood along with the environment is recycling and using as many natural products as you can. Make sure your neighborhood has recycling bins to make it easy to throw trash in the correct bin. You can use compost piles to help your yard and save the environment at the same time. Eating natural will also directly aid your health.
The Ethics of Finance in Business
When it comes to the financial industry, the importance of ethics within the workplace can never be overstated. Peer business leaders, family, and the general public depend on those that work within the financial services industry for lifelong financial advice. A strong financial sector sets the stage for a thriving economy.
The irresponsible ethical behaviors that surfaced during the 2008 mortgage backed securities scandal has caused a rise in the level of ethical attachments that people expect. This article will briefly discuss practical ways that ethics can play a large role in the progression of business and the overall economy as well.
The Importance of a Stable Financial Sector
All economic activity in a given country is tied to the financial industry in one way or another. The financial decisions made within the industry will determine the flow of capital between producers and consumers. Financial decisions also determine the interest rates that will be charged to lend and borrow money.
Transparency in financial record keeping is imperative if the public is to gain an understanding of the financial decisions that will play a role in their personal lives. The Generally Accepted Accounting Principles addresses the need for transparent accounting records. However, accounting records are not the only factors involved in making financial decisions.
Financial Industry Regulatory Authority
The Financial Industry Regulatory Authority is the largest regulator of firms that sell securities within U.S. capital markets. Their role is to protect investors by placing a specific set of guidelines in place for service providers.
FINRA works well for firms selling securities but, does not regulate any of the companies that decided against becoming a publicly traded company. These companies are forced to employ their own strategy for achieving transparency and establishing trust.
Good Reputations are Good for Business
Ethics are important when it comes to the general public but, they are also important when it comes to interacting with other business owners. Conducting business transactions require a bit of trust for the person or the company that you are doing business with. A reputation for shady record keeping or unethical financial industry employees can ruin a company’s chances for growth. The mere accusation of financial irresponsibility is enough to wreak havoc on the amount of new business that a company acquires each month. In some cases, a poor reputation can drive existing customers away entirely.
An Informed Person is More Likely to Spend Money
Companies operating with the financial services industry should be especially transparent on a customer level. It is important for consumers to be made aware of information that guides their decisions. While professional codes of conduct require the disclosure of certain types of information, they don’t require that a company be completely transparent.
Nonetheless, whether a person is an end user or a potential investor who got their degree with an MBA specialization, the more information they have about your company the more power they have to make an informed decision about how they should spend their money. Honest financial reporting is likely to draw even more support to an ethical company. However, inconsistent record keeping will surely discourage all financial relationships in the future.
7 Reasons to Plan a Vacation
Getting away is fun, refreshing and relaxing. And whether it’s for the weekend or for the month, the benefits of planning a vacation extend well beyond being just “fun, refreshing and relaxing.” Taking a vacation is actually one of the best things you can do for your health. Why? Largely it has to do with the stress-reduction benefits of vacations, but it’s more complicated than just that. If you need several good reasons to daydream about azure water or relaxing with a book, read on.
1. Vacations reduce your risk of heart attack. Numerous studies have shown that not taking a vacation for several years straight drastically increases your chance of having a heart attack. This holds true for both men and women. The benefits of getting away from the day-to-day stresses just got real!
2. Vacations help you eliminate bad habits. Many bad habits are related to stress, such as stress eating, binge drinking and smoking. Going on vacation reduces the stress, so you’re less likely to be triggered to engage in your bad habit. Further, you may not realize how bad your habits may have gotten; time away highlights these behaviors. Vacation is the perfect time to tackle these negative behaviors and replace them with new, healthy ones for two reasons: you have the time and energy to make these changes, and you are removed from the normal environment where you engage in the negative behaviors. Think of vacation as a clean slate.
3. Vacations keep you from burning out.Many people view their jobs as one big constant pile of stress. While taking a vacation does not change the nature of your job, taking some time away will usually refresh you to the point where you’re again able to handle the curve balls your job throws at you. However, sometimes getting away from it all has an entirely different outcome…
4. …Vacations give us perspective. If you get away from work and still can’t remember a single thing you like about your job, this is a pretty good indication that something needs to change. Vacations lead to insights about our lives — not just about work, but about relationships, friendships, money, etc., too — that we wouldn’t get without getting away.
5. Vacations reduce your stress levels for weeks. Studies show you’ll still be feeling the stress-reducing benefits of your getaway (no matter how short or long that getaway was) for at least five weeks after you get back into town. Who said hotel rooms weren’t a good investment?
6. Vacations help us connect with loved ones. When you’re in the daily grind, conversation with friends, partners and children start to get repetitive and monotonous. Change your context and do new things, and you’ll have new conversations that help you get to know your loved ones again.
7. Vacations give your brain a rest. It’s important to rest and recharge, and with the near-constant need many of us feel to check email and social media, it’s hard to take the time to recharge during a normal workweek. When you go on vacation, it’s even more important to fully unplug. Allow yourself an entire 24 hours (or more if you can manage!) away from texting, tweeting, emailing, Facebooking, and so on. This time you spend unplugged will bring many stress-reduction and recharge benefits.
And best of all? The health benefits of a vacation start before you even leave home. Studies show that just planning a vacation leads to remarkable health and relaxation benefits. Score one for the daydreamers!
For other self-preservation and stress reduction resources, check out the author’s Guide to Treating Anxiety with Yoga.
About the Author:
Tina Daniels writes about self-preservation and the benefits of travel. Take time to learn more about the benefits of rest and relaxation.
4 Surprising Services You Didn’t Know Health Insurance Covered
There is nothing more frustrating than setting up an appointment with your physician or specialist, just to find out that your health insurance provider does not cover the service. You have to decide if you want to meet with the doctor and pay for the services out-of-pocket, or if you should just cancel the appointment without a rescheduled appointment in sight. So many people focus on what is not covered under their health insurance plan that they fail to recognize what is covered. You may be surprised to find out, though, that insurers offer a variety of different physical and mental health services that you probably are not taking advantage of.
Dealing with Stresses That Affect Every Day Life
Your mental health is just as important as your physical health. Many people do not seek treatment for things like eating disorders, alcohol abuse, and anger issues because they do not know that is covered as a behavioral health benefit. If you are feeling depressed, you suffer from anxiety, or you need to be treated for other mental health issues that are affecting your ability to cope with everyday life, meeting with a doctor specializing in behavioral health may be covered. Find out what programs are offered, coordinate care with the right specialist, and get treatment so that you can manage.
Behavioral Therapy and Counseling
Another service that is covered is counseling. The typical health plan will offer coverage for a specified number of sessions. In some cases, you will be required to pay a portion of the bill and the insurance company will pay anything above and beyond the patient portion. Classified as outpatient mental health care, counseling can help insured deal with social issues, work-related stresses, and relationship issues at home. It may even cover counseling to help you be a better parent if your child is exhibiting behavioral problems. You may be limited in which therapists you can see depending on if you have an HMO or a PPO. In most cases, you will need a referral for the services from your primary healthcare physician or your child’s pediatrician. Find out how you can take advantage of counseling services and seek the treatment you need.
Physical Improvements in Appropriate Situations
Everyone knows that voluntary cosmetic surgery is not covered under any health insurance plan. In fact, insurers take a lot of time writing up exclusions for cosmetic surgery. But physical improvements are not always excluded. In appropriate situations, health insurers will pay for physical improvements. Some of these situations include:
- Breast reconstruction after a mastectomy (includes both breasts to achieve symmetry).
- Breast reduction surgery for back problems.
- Mole removal if the mole impedes vision or rubs uncomfortably against clothing.
- Surgery to correct conditions affecting appearance in dependents under the age of 18.
- Surgery to correct areas of the body that have been affected by injury.
- Surgery to reconstruct areas of the body that have been affected by genetics.
Health Club Memberships and Health Coaches
Preventative care is very important. More and more health insurers are focusing on preventative care to keep claims costs down. Now, you may be able to get free or discounted health club memberships so that you can stay fit and active. You also might be able to get health coaches covered so that you can learn how to eat and train properly.
People often over-focus on hidden health insurance exclusions. Instead of assuming the service you need isn’t covered, look for coverage options that can help you live a longer, healthier life.
Jessica Bosari writes about term life insurance info and the health issues that affect your life insurance rates.
6 Considerations Before Turning a Shed to a Home Office
“Location, location, location” is the mantra of real estate advocates, signaling the importance of a piece of land’s location. However, what to do with space is the focus of homeowners. How can you make the most of the space you are paying for? Could out-of-the-box thinking make the most of the money coming out of your pocket?
Traditionally, that shed in the backyard is reserved for dust, unused exercise equipment, and implements of lawn maintenance you’re not completely sure how to use. Creative thinking and elbow grease can transform that shed into your new home office.
Before you make way for your hammer and nails, consider deconstructing the situation first. What are some elements deserved of your consideration before the transformation begins?
Ambiance
To start, don’t try to make the space accommodate two needs at once. It is no longer the resting place for your exercise equipment; it is now your tower of business power. Get rid of unnecessary elements unrelated to work. The new arrangement will fill the space with business implements, changing the mood and ambiance of the shed workplace.
It’s difficult to focus on work when catching remnant grass odor from the lawn mower, or bumping your knee into the exercise bike you planned on using three years ago. You can’t expect professional output unless you create a professional ambiance.
Natural Light
Don’t underestimate the power of natural light. Some need to reproduce it to maintain positive moods. Aside from lamps, utilize available natural light or engineer a window. To gain perspective, place a chair inside a room of your house with no windows; do the same in a room hosting natural light. It’s a big difference. As an alternative, you could leave the door/entrance of the shed open, but that may pose a temperature issue depending on your location and time of year.
Extreme Temperatures
The shed could be a viable space to inhabit most of the year, but what about periods of extreme temperatures? You’ll need solutions or to find an alternative workspace during particular months.
Working in a shed in Florida is pleasant from September through May or June, but what about the heart of the humid summer? It would be dreadful to be in a shed without ventilation or air condition. Alternatively, an outdoor shed in Colorado is a viable implement during the spring, summer, and most of fall, but what about the winter? It’s going to be extremely cold in a shed without insulation or some source of heat in the winter months. Think about your particular situation.
Electricity
Great! Your laptop can get Wi-Fi from your home, but the battery is losing energy, and the nearest electrical outlet is also in the home. You could run an extension cord from your home into the office but it creates a potential safety hazard as well as an eyesore. Alternatively, you could establish electricity in the new office space. This involves money, but you could write the cost off as a business need come tax season, better to have electricity in the workspace.
Distraction
Is your shed a hundred yards from your home or hundred paces? Think about the level of impending distraction related to family members, neighbors, or noise in the immediate area. Can you deal with the distraction? If not, you’ll have to think about distracting your attention from all the distraction, achieved by soundproofing the workspace, playing music, placing a lock on the door, etc. Consider all potential distractions, and then ponder how you can address or escape them.
Added Space or Income
Do you have a friend entertaining the same idea or in need of a workspace? Consider building a bigger shed than originally planned, or building an extension onto your present one. If you could accommodate two working people, you could charge the other professional rent.
As an entrepreneurial endeavor, you could advertise space in your local paper, attracting a professional in need. You may have a designated place of work away from home, but many freelancers do not. You could make a passive income each month, transforming your hardly-used shed into someone else’s potential workspace.
About the Author:
Gwen Stewart is a business development professional and writer for Outbounding.com on behalf of http://www.ShareFile.com. Her line of work requires she have reliable file transfer protocol solutions as well as a solid strategy for meeting tight deadlines. Any spare time she can scrape together finds her hiking, reading and enjoying the company of great friends.
5 Ways to Burn Calories While at Work
In the past, workers often moved around and lifted objects frequently in their jobs, but increasingly, workers these days are expected to sit still and stare at a computer screen. Even the most basic of tasks that used to require some movement are now being replaced by computer-related tasks — meetings can be held over videoconferencing, conversations can be held on Internet chat, and documents do not need to be printed and distributed, but rather emailed. So is it any surprise that workers are also gaining weight?
But it doesn’t have to be this way. Although computers are here to stay, there are a few things any worker can do to burn extra calories while at work. Some of these suggestions burn a lot of calories, and some burn just a few, but if you make them habits and engage in them day after day, the calories burned will really add up. Here are some easy ways to burn extra calories at work:
1. Use your lunch hour wisely.
Get some exercise during your lunch hour. People rarely take a full hour to eat, and with a little planning you can make great use of this time to burn some extra calories. Walk rather than driving to the sandwich shop where you get your lunch, take a spinning class and then eat after lunchtime, or do some yoga with your office door shut or in the park.
2. Get moving at least once an hour.
Sitting slows your metabolism to a crawl, so it’s important to keep your body moving as often as possible while you’re at work. Even standing up to stretch is better than just sitting there. Make sure you get some sort of movement at least once an hour to keep your metabolic rate up, whether it’s doing jumping jacks in place, walking to the coffee machine, walking up the stairs, or just touching your toes.
3. Work standing up.
Although standing is hardly a high-impact aerobic activity, it does burn significantly more calories than sitting. It also makes you more productive at work (as long as you have the option to sit down when you need to), so you may be able to leave work earlier! For as easy a way to burn calories as standing is, there’s no reason not to incorporate periods of standing into your workday.
4. Engage in at-desk strength training.
It may sound counterintuitive, but there are a surprising number of ways to strengthen your muscles while you’re sitting at your desk. Slowly lift yourself up out of your seat with your arms and then back down. Do modified push-ups against your desk. Repeatedly lift your legs out straight in front of you and then lower them back down. Lift your knees under your desk and lower them. Even just tensing a particular muscle, holding for a few seconds and releasing can help strengthen that muscle.
5. Quit cutting corners.
Start taking the elevator instead of the stairs, carry light boxes rather than using a dolly, park at the far end of the lot, and walk to a coworker’s office rather than calling or emailing. Modern conveniences have cut out the need for much of the exercise we would otherwise get in the course of daily life, but these “conveniences” may end up costing us dearly. Even 10 or 15 extra calories burned here or there will add up over the course of a day, week or month.
About the Author:
Valerie Cecil writes about all things “career” for Outbounding.com. In her spare time, she works toward workplace safety certifications through ETrain Today.
6 Steps to a Better Retail Floor Plan
When a retail store is well-planned, customers know right where to go for each item they need the first time they enter the store. Poorly planned stores, however, lose customers who get frustrated with not knowing where to go, or lose out on sales opportunities by not placing impulse items strategically. Also, different types of layouts work better for some types of stores than others, and it can be confusing trying to decide on one.
But creating a retail floor plan is more than just guesswork. Follow these steps for a better retail floor plan, and you’ll instantly be on your way to greater success.
1. Create a small-scale diagram of your floor plan. Get out the tape measure and do it right. This allows you to test out ideas that seem like they’d work without committing to them, rather than just guessing that a certain section of your store will fit in a the space you have in mind.
2. Look at your competition and stores of similar size. Although everyone wants to be unique, stores are laid out in specific ways for a reason. Follow what your successful competitors do, and you’ll likely be on the path to success yourself. Similarly, pay attention to how similarly sized stores use their space, effectively or ineffectively, and take inspiration from what you learn.
3. Understand your limitations. Read the laws and regulations regarding retail floor layout in your area. Fire codes may limit where and how closely spaced you can put certain merchandise.
4. Consider your space and type of store when choosing a layout. For most stores, arranging shelves or sections in straight lines is the most space-efficient layout, as well as the easiest to navigate, but depending on your clientele, you may prefer a different arrangement. Some stores prefer to arrange shelves diagonally, particularly self-service stores, because this type of floor plan allows for easy movement between aisles, and also allows for visibility both for the cashier and the customers. High-end boutiques often prefer using an angular plan, in which customers must walk around displays to create traffic flow in curves. Traditional clothing stores often go with a geometric layout, in which racks, shelves and fixtures create the design. Some stores, particularly larger stores, use a combination of arrangements within a single store.
5. Draw up a tentative diagram for how you’d like to lay out the store. Then bring out the measuring tape again and see if it seems realistic. Think critically both about the size of spaces relative to the size of your inventory for a particular section, as well as about being sure that clothing sections, if relevant, are near dressing rooms. The area leading to the women’s restroom should display items that would be of interest to women, but that they might not otherwise see, and the men’s restroom should do the same. Create space near the cash register that displays impulse items, and make sure you have enough cash registers that customers will not leave in frustration. Larger stores should have cash registers on each floor, if not in multiple locations per floor, so that they are easy for hurried customers to find.
5. Use real objects, such as cardboard boxes, to simulate merchandise in the locations you’re envisioning. If you don’t have enough boxes, at least draw outlines with painters’ tape.
6. Adjust and readjust as you see fit. Think about the layout and consider your options before putting your merchandise into the space, because it’s much easier to make adjustments while it’s all still just on paper. Once you’re happy with your layout, get to work bringing your dream to life!
About the Author:
Valerie Cecil is a research coordinator, marketing specialist and writer for Outbounding.com. Her work allows her to investigate many topics, ranging from online consumer relations to effective communication in the workplace. When she is not working, she enjoys kayaking, watercolor, and scouting out the cutest Gift Boxes From Retail Packaging she can find.
Measuring Mobile User Satisfaction
If you don’t have a mobile website for your business, perhaps you should, and if you do have a mobile website you should do all you can to create a positive mobile experience for your consumers. The following statistics can help demonstrate why this is true:
- U.S. smartphone ownership has passed the halfway point with 50.4% of mobile users now owning smart devices according to Nielsen US mobile market statistics for Q1 2012.
- 64% of survey respondents who have smartphones have made a mobile purchase after seeing a mobile ad but nearly three-quarters (74%) haven’t received mobile ads from their favorite brands (Source: Mobile Advertising Survey, 2012)
- 25% of consumers engage in online shopping only via mobile (Source: Prosper Mobile Insights, 2012)
- Mobile messaging ad spend will reach $7.4 billion by 2017, driven by a surge in location-based services. (Source: Juniper Research, 2012)
It’s clear that to stay competitive in the marketplace you need to be a player in the mobile landscape, but how can you know if your mobile experience is meeting your consumer needs and expectations? The answer lies in the latest mobile measurement analytic tools. When you have quantifiable results that measure customer satisfaction today, and can predict how their mobile experience will affect future consumer behavior, you will gain huge insight that can put you ahead of the competition.
The practice of evaluating online advertising and marketing efforts (often called “web analytics”) can be more accurately described as digital measurement and analysis. Companies that don’t invest in these technological tools are missing out on numerous derived benefits that can be used to manage their business into the future.
ForeSee was the first company to develop technology to measure the customer experience of a random, but representative sample of visitors to mobile optimized sites and mobile apps across all leading mobile platforms. The company currently measures the mobile experience for a host of organizations across the public and private sector including ABC, ESPN, The Federal Emergency Management Agency (FEMA), RIM/Blackberry, and StubHub, among many others.
ForeSee’s mobile solution, is built upon a scientific and predictive methodology that quantifies how the customer experience impacts loyalty and future purchases across channels. This is their newest technology which enables companies to understand how customers think, feel, and act after they finish interacting with a mobile site or app so you can assess the value of your mobile initiatives.
“Our new on-exit survey capability will allow our clients to measure the entire mobile experience and what people do after they leave it,” said Eric Feinberg, ForeSee’s senior director of mobile. “We can find out not only whether the mobile experience met their needs, but whether they went on to buy from another channel, from a competitor, or whether they did something else entirely. This kind of data and analysis will bring tremendous depth and dimension to understanding the mobile customer experience across all channels.”
Executives and managers are able to drive future success by confidently optimizing the efforts that will achieve business and brand objectives. The result is better business for companies and a better experience for consumers.
About the Author:
Patty Whelan is a seasoned copywriter with significant experience producing original content in all facets of online and offline marketing communications, with specialties in all aspects of Search Engine Optimization copy writing. Her work has covered a broad range of topics for varying industries and has been published in print and electronic media. The focus of her current work concentrates on the electronic payment processing industry and credit card processing for small business.
Why Cost Analysis is Still Important
In an increasingly tech-savvy business world, it’s fair to ask whether cost analysis is obsolete. After all, today’s markets are often analyzed by frighteningly complex digital programs with little connection to the physical landscape. It’s a tall order to ask traditional “numbers crunchers” to adapt to an environment in which tremendous volumes and new types of numbers must be crunched on a continual basis.
Despite this new reality, it’s not yet time to give up on traditional methods of cost analysis. These techniques are flexible, responsive and provide valuable insight that can be applied to everyday situations. In a rapidly-changing business environment, cost analysis remains essential to the continued smooth functioning of many organizations.
Cost Analysis
There are several related forms of cost analysis. The simplest of these, cost allocation, simply describes the cost of a program or agency in “unit cost” terms. In most cases, this is an arithmetical calculation that divides the total cost of a program by its total number of users.
Cost-benefit Analysis
Cost-benefit analysis adds another layer to the cost allocation process. Once the total unit cost of a given program or service has been obtained, cost-benefit analysis assigns an official rate of return to the operation as a whole. This is typically expressed as a ratio between the total cost of the services provided and the total value of its measurable benefits. Cost-benefit analysis is most often used to determine whether a program’s cost warrants its implementation. If it’s used properly, this can be a powerful tool for a business looking to find an appropriate market value for a given product or service. It can also be used to determine whether a product or service is worth marketing at any price.
Cost-effectiveness Analysis
Cost-effectiveness analysis is basically a comparative analysis of cost-benefit calculations. It assumes that multiple programs will produce similar outcomes and then determines which will do so most efficiently and effectively. In most cases, the program with the lowest unit cost “wins” this analysis.
Cost analysis remains ubiquitous. From the defense industry to the fast-food business, competent organizations use this technique to stay competitive in a fast-paced economy. Cost analysis can also have less obvious impacts that may ultimately provide even greater benefits for responsive businesses.
For instance, Nike faced a public relations crisis during the 1990s after word leaked of its heavy reliance on child labor in independently-owned factories in the developing world. Many urged the company to react swiftly and discontinue its relationships with these third-party facilities. Instead, Nike mounted a cost-benefit analysis and determined that the interests of both the company and the workers would be better served by keeping production online, increasing workers’ wages and benefits, and mounting a social-program campaign to mitigate the negative effects of harsh labor practices in third-world countries. By competently implementing the findings of this cost analysis study, Nike neutralized the threat to its reputation and continues to thrive today.
While financial costs are a crucial component of all cost analysis processes, they are not the sole determinant of the worth of a program or service. Medical professionals often utilize cost analysis to compare courses of treatment for gravely ill patients. In most cases, these analyses disregard cost and focus on quality-of-life metrics. Courses of treatment that appear to prolong life for longer periods of time without debilitating side effects tend to do better in these types of cost analyses.
It’s often said that a well-worn cliche persists because it contains an element of truth. The same can be said for cost analysis: While it’s not the sleekest or sexiest data-analysis tool out there, it continues to help business owners make informed market-oriented decisions that preserve capital and promote success. Cost analysis has yet to outlive its usefulness.
Byline
This article was composed by Roy McClure for the team at Kanetix; contact them to obtain insurance info for the most popular cars and favourite rides in the USA and Canada.
