June 2nd, 2008
Cost/Benefit analysis is a well-known technique that is widely used in any business transaction. From simple to large project management Cost/Benefit analysis is resorted to assess the full financial implications of a business operation.
As the name implies, Cost/Benefit analysis is adding up the value of benefits arising from implementation and subtracting the costs associated with the process. Invariably, costs are either one-off deal or recurrent. However, benefits are often experienced after a minimum period of time. This time is built into the Cost/Benefit analysis as payback period, when the benefits start accruing, repaying for the costs incurred. Most companies set a specific period such as 3-years to gauge results.
In its basic form, Cost/Benefit analysis involves weighing the financial costs and benefits - for e.g., a company deciding to provide office transport instead of offering transport allowance. In such a process the company would work out the cost of hiring transport or buying appropriate mode of transport for safe return of employees versus individual payment passed on as transport allowance to the employees. It would however not measure the satisfactory levels of the employees, the loyalty factor it could accrue to the company, the punctuality it would ensure and the teaming and bonding that the travel could bring among the employees. These are the intangible benefits for which there are no numerical value assigned.
In project management, Cost/Benefit analysis invariably takes a major share of the process. In fact, no project is undertaken without it, as unless benefits outweigh the costs, the need for incurring costs in the first place is rendered meaningless. This is how most financial transactions are worked through, excluding of course the political ones.
In the usual Cost/Benefit there is no scope for incorporating intangible disadvantages and benefits. However, intangibles such as emotional satisfaction, environmental concerns and long-term future consequences are vital to the success of any financial transaction. This is exactly where Mind Maps can score above the mere Cost/Benefit analysis.
After thoroughly assessing the financial implications of a business transaction or a process, it is vital that an exhaustive appraisal of the often-neglected intangible elements, are factored in to provide a complete comprehensiveness to the process. Mind Maps help you to explore these aspects scrupulously and systematically.
By looking at issues in all their widest aspects, Mind Maps help you to prepare for contingencies and address them effectively, and also to see the links between them. Apart from providing a careful understanding of the whole issue, they could provide new opportunities and avenues for further action or growth hitherto unseen. As you gain the full picture, you will be able to see the associations between various tangible and intangible elements, and to find creative approaches and solutions.
That is why Mind Maps can be a useful device to help you charter into unknown territories. While Cost/Benefit analysis derives its numerical value, Mind Maps go beyond it to bring in the deeper, underlying causative and emotional factors. They help in rendering wholesomeness to the process and provide the highest mental satisfaction. Hence, using Mind Maps indeed has a psychological advantage. You could learn about them and gauge for yourself.
About the Author:
Dr. Vj Mariaraj is a Mind Map enthusiast and has been using Mind Maps for the past twelve years. He has created over 5650 Mind Maps. To learn more about mind mapping send an email to freemindmap@aweber.com He is the founder of BusinessBookMindMap.com that creates Mind Map Summaries of Business Books. To learn more visit http://BusinessBookMindMap.com/mind-map.php?ea19
June 2nd, 2008
My daughter has realised what took me decades: you don’t get wealthy working for a salary. She put herself into debt establishing a business selling body lotion products and a few other things like hand bags, men’s shaving creams and gift baskets.
Every second Sunday we’d load my SUV with her three tables, plastic containers full of lotions and potions, cash float, and off we’d head to the Todd Mall Market (in Alice Springs, Central Australia). I’d look after grandson Tory while she raked in the money.
There’s a solid, but intermittent demand for her products. She’d make a reasonable turnover every Sunday, but between markets, sales were limited to the odd returning customer. Not the stuff that dreams … or millionaires are made from.
Without a shop or a daily presence, it is difficult to sell anything. Additionally, who comprises the market? Is it the hundreds of thousands of tourists who stream through Central Australia every year, or locals who want to get rid of dry skin, buy presents, or just pamper themselves with a new product?
When my daughter asked me whether she should set up a shop, I was mindful of the 80% of businesses that fail during the first year; that it often takes businesses two to five years of losses before they see a profit; that a rental contract for three years would still need to be paid despite insufficient income. Naturally, I was seen as an obstacle to progress.
My advice to my daughter was to do some research … find out whether the products she sells are in sufficient demand to earn an income that will cover fixed and variable costs and result in a reasonable profit (at least equivalent to what she would earn on a salary).
Common sense and many marketing people tell us we need to do a feasibility study or at least do something to gauge product demand before sticking out our financial necks.
Among the many ways of identifying customer demand is to measure the degree of interest in one’s articles. This has worked for me and could work for my daughter, Meredith.
Apart from being involved with fora and listening to the questions people ask and the needs they have, “I have very dry skin, do you know of a lotion that would help?”, articles and the number of times they are read can give a good indication of interest. That might not be demand, but interest can lead to demand. Here’s an example. Recenty I posted three tutorials about letter writing on Ezinearticles.com which were about:
- Parts of a letter (140)
- Writing business letters (109)
- Format of business letters (66
Within a day or two, the numbers of people who had read my articles were those in brackets above. What does this say?
There is more interest in people who want to know the parts of a letter than there is in people who want to know about writing letters or formatting letters. Big deal. How does this help me gauge demand?
It clearly doesn’t tell me that there are a maximum of 140 people who will buy my soon-to-be-released ebook about business communication. But, it does tell me that there are 140 people who might be interested. Add that to other research, like the dozens of people who email and ask if I have an ebook about business communication and the figures start to look good. Do a bit more research with search engines etc and it looks even better.
When people read articles in which they are interested, they are part of a potential niche market. You can take advantage of this to determine what the potential is for a product or service you are introducing. On its own, it’s not totally reliable, but with other data, it can be a valuable asset.
When you are planning your next market feasibility study, use the traditional methods AND submit one or more articles that will give you an indication of interest. If you do that, you’ll have another indicator of whether you’ll make a profit or keep feeding money into a lost cause.
Psst … Anyone need some butterscotch hand cream … or perhaps some lip balm?
Copyright 2005 Robin Henry
Robin Henry is an educator, human resources specialist and Internet marketer whose products help small businesses and individuals improve performance by accessing smart technology, smart processes and individual development. He runs his business Desert Wave Enterprises from Alice Springs, Central Australia and can be found at http://www.dwave.com.au/affiliate or http://www.winagovtjob.com
June 2nd, 2008
Are you disorganized to the point of finding yourself spending more time trying to locate things rather than actually working?
Typically at work there are probably two main areas that lead to a sense of complete disorganization:
1. Your desk
If you’re the type of person who believes that how busy you are at work has a direct correlation to the amount of paper on your desk, you need to get this thought out of your head.
Do you print out virtually everything that you come into contact with and then pop it onto a pile on your desk for future reference? Have you run out of space on your desk to actually create new piles?
Start by figuring out the difference between things that need to be printed and things that don’t.
Then figure out what you have that should be kept, and what can be discarded.
Organize the papers that need to be printed or kept on file. Put them into a file folder system that makes sense to you and allows you to easily and quickly find it in the future. Don’t go crazy and simply take all the stuff on your desk and put it into folders. If you don’t need it, don’t keep it.
2. Your email In Box
Are the type of person who keeps a copy of every email you’ve ever received and hasn’t heard of the “delete” button?
Do you have 300 folders set up in your email In Box to organize each email that you receive and now have trouble finding the folder you’re looking for, let alone the contents of each?
Email has become so pervasive especially when you add in spam so you really need to ensure your In Box doesn’t swallow you up.
If you don’t need the email, delete it immediately after reading it. Leaving it in your In Box and expecting that you’ll go back and delete it later on in the day most likely means it will still be sitting in your In Box in several months time taking up unnecessary space.
Just like you have to manage your time, you need to manage your In Box too.
What you might do in general terms to move from being disorganized to being organized is to take small steps. Start cleaning up your desk and discarding papers that you really don’t need anymore. Get rid of emails that simply aren’t needed anymore and that you won’t be referring to in the future.
Also, think twice before printing something. Do you really need to print it or can you simply keep a soft copy on your computer for future reference?
Prioritize your daily tasks to ensure each gets done. Once you get into a routine, you’ll most likely find you start doing things differently and more to the point more productively.
Carl Mueller is an Internet entrepreneur and professional recruiter who wants to help you find your dream career.
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