How Small Business Owners Can Assess the Value of What they Pay For
It can be difficult enough for small business owners to define their own value propositions and arrive at comfortable pricing, so when looking outwards at the value of products and services that your business consumes, assessing value may be difficult without some additional contextualization.
How much time are you saving? Part of defining the value of a product or service is quantifying the amount of time that using it saves you. First, you must evaluate the value of your time. What would it cost to hire you on an hourly basis? Once you have number you feel adequately reflects the value of your time, you can calculate the added time value that you have recouped. This should be a serious consideration for business owners when choosing services, since if an additional time investment is required to make an inferior quality service or product create a desired result, it’s highly possible that business owners aren’t actually saving themselves much in the long run, since they could be dedicating more time to making their business function more effectively.
What is the difference that higher or lower quality makes in terms of the item in question? When purchasing items that your business needs, there will almost always be areas where quality can be sacrificed for price point. While it is often tempting to go for the cheapest possible items in order to save, stop before you do and consider the importance of the item’s function to your business. If you will be using something heavily, having it break or wear out quickly or unpredictably can create major bottlenecks in productivity. If something is going to figure heavily into the long term running of your business, it is usually better to make the investment in an item that has the potential to last long enough for it to begin to pay you back.
Photo Credit to Chris Potter on Flickr