Money, Money, Money! It’s all about the bottom line: General tips on making cost and profit estimates

Three Issues to Consider Implementation costs Potential loss of revenue Potential net gains

Implementation Costs What equipment will be needed? – Must it be bought new? – Would it be more cost-effective to rent? – Is it more of something we already have in place? What software will be needed?

Implementation costs (cont.) What additional facilities will be needed? – Permanently or temporarily? – Built? Cost of construction Cost of real estate – Bought? – Rented?

Implementation costs (cont.) Manpower – Will new employees need to be hired? How many and at what wage level? – Will currently employed people be given new responsibilities? Do they need to be compensated for this? Salaried vs. hourly Promotions

Implementation costs (cont.) Training – Will new trainers need to be hired? – Will the training be one-time, or recurring? Remodeling and revamping – What will be the cost of changing already existing entities such as a website? – Will there be additional maintenance costs?

Potential Revenue Losses Temporary – Shut down of site/building/etc. while changes are made – Slow down of services while changes are made Permanent – Customers who will be turned off by changes (if any) – Discontinued products/services

Potential Net Gains Potential new customers Potential increased usage of services by existing customers Potential money saved

Helpful Hints on Research Look up companies/services/products and determine what they charge for implementation costs Find cost estimates of companies who have taken comparable measures (if possible) Gauge level of current customer dissatisfaction to project potential growth in sales