The kids have gone back to school and life can return to some normality; we’re reflecting on our summer and considering plans for next year’s holiday. It is only after the event can we truly count the cost of our holiday and ask ourselves “how much did it cost? did we get good value? what will we do next time?”
Getting to a reasonably accurate “total cost” involves a glass of wine and mental arithmetic. During which we realised that “we didn’t COUNT THE RABBITS!!!” But I’ll come back to that later!
Whenever we think of a significant purchase, most people have a budget to work to – which then narrows down some of the options eg how long to go for, where to go, full or half board. We then hope to get down to a couple of preferences which we make our best guess on instinct (or TripAdvisor rating) and place the deposit.
Then there is relief that the decision is made, excitement about what is ahead and hope that we haven’t been ripped off by online fraudsters.
Budget drives so many of our decisions in the corporate world as well as our personal lives. Start with a value to spend (that is as much as you can squeeze out of your Finance Director) and then start your research.
Some choices we come often across are:
- Pay top dollar for an experienced salesman or go for a junior exec?
- Invest in iPads for the team or stick with laptops?
- Buy a full package CRM system or build your own?
- Partner with an L&D company or have managers deliver training?
If keeping to budget is the Holy Grail, then we will either:
- Overspend (and eat humble pie with the FD)
- Spend to budget and get what we paid for
- Spend to budget and be disappointed in the end result which doesn’t “solve our problem”
So, before you make that investment decision, be realistic about the costs and “COUNT THE RABBITS”.
We broke our holiday down broadly into the usual areas: Flights / Accommodation / Car Hire / Food & Drink / Trips
What we failed to realise or build in was enough contingency for overspend. 11 days on holiday is a long time for children to persuade, influence and manipulate their parents; and whilst in a good mood, those parents can make some hasty decisions.
We live busy lives and adding to that busyness is something we’re not keen on. However, the negotiation skills of our children meant that whilst still on holiday, we’d ordered a hutch, play toys, food, sawdust and litter trays – and made an appointment to view dwarf lop eared rabbits on our day of return! Obviously, the children fell immediately in love with the “most beautiful rabbits in the world” and they came home with us (the children and the rabbits). Well that was a decision that cost @£300 and is an 8 – 10 year commitment that we didn’t see coming!!
If we’re really honest, can we be guilty of that in business??
So, COUNT THE RABBITS when making those decisions! Consider as many aspects of cost as possible and build in an overspend. No one can predict the future but we can spend some planning time challenging our numbers.
Some questions you may ask yourself to explore hidden costs:
Pay top dollar for an experienced salesman or go for a junior exec?
Cultural fit in the team? time to train? impact on customer? results expected and by when?
Invest in iPads for the team or stick with laptops?
What difference will it truly make? time savings? morale? ongoing support services? system integration?
Buy a full package CRM system or build your own?
Time to build? quality of end product? tailored to your business? integrated into your business? ease and speed of user interface
Partner with an L&D company or have managers deliver training?
Specialist capability? knowledge of your business and people? skill in implementation? time? manager motivation? impact if it goes wrong?
What else can you do?
History – what has changed since the last time and what do we know now that we wish we had then? History can be misleading so bear that in mind if only limited experience to look back on.
Consult – people in your business, friends, trusted advisors or mentors for insight
Partner – ask a supplier. They should have the experience and knowledge – but beware the over promise!
Plan – take the relevant time to plan and allow others to review. Will it be “buy cheap, buy twice” or will it be fit for purpose
Instinct – listen to what your gut is telling you but also challenge it; what we believe to be true isn’t always the case; challenge those beliefs
Value – what is the true value to the business of fixing the problem? How will I work out my Return On Investment (ROI)?
Time spent establishing full costs; to “COUNT THE RABBITS”; won’t be wasted. It will help you make informed decisions and have clarity in expectations for all parties.
You will also be able to take a similar approach when working the ROI.
Cost is important, but remember to “COUNT THE SMILES” that those extra costs brought you.