How To Calculate The Monetary Cost Of A Business Problem

It’s easy to make excuses and say that now isn’t the right time or argue that you should be able to find a solution to a business problem. But just how much are these excuses and your business challenge costing your business’s bottom line? 

In this article, I’ll share: 

1. The three benefits of knowing what the real dollar cost of a business challenge to your business is. 

2. A nifty exercise to help you calculate the dollar cost of your biggest business challenge.

3. How knowing the true cost can help you make smarter investment decisions to overcome business challenges faster!

4. A 90-minute opportunity that will instantly solve your problem.

The three benefits of knowing what the real dollar cost of a business challenge to your business is that it:

1. Gives you additional focus and motivation to solve the issue.

2. Helps you to be more decisive and find solutions more quickly. 

3. Clarifies how much you can spend to fix the problem.

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A nifty exercise to help you calculate the dollar cost of your biggest business challenge.

Grab a pen and paper, and let's calculate the dollar value of your biggest business problem:

1. What is your biggest business challenge at the moment?
   
   

2. How much time is it going to take you to solve this problem?
   
   

3. How much time have you already spent thinking about this problem?
   
   

4. What is your hourly rate?
   Note: this is not the rate you charge customers, this is your annual income (including bonuses, owner’s draws) ÷ hours worked for the year.
   
   Hourly Rate Formula: (yearly income + bonuses + owner’s draws) ÷ weeks of the year worked, excluding vacations/hours worked per week = hourly rate.
   
   

5. Now add up your answers in 2+3 and multiply it by your hourly rate (4).
   The answer is the dollar cost of this problem to you.
   
   Now let's take it a little further:
   
   

6. What will happen if you don't solve this problem?

Think about: 

• Employees leaving (FYI, replacing an employee can cost up to 6-9 months of the employee's salary in training and hiring costs. 

• Customers leaving

• Lost income opportunities that the problem is causing. 

List all the negative consequences of not solving this problem.

Now assign a dollar value to all the things you listed and add them up. 

7. Add your answer in 5 to your answer in 6.

The value in 7 is the total dollar cost of the problem you mentioned in 1 to your business.

How knowing the true cost can help you make smarter investment decisions to overcome business challenges faster!

Now that you know and understand the dollar cost a business problem is having on your company – you can make more informed decisions about how much you’re willing to invest to solve this challenge.

A 90-minute opportunity that will instantly solve your problem.

What if we could take 90-minutes to come up with a solution to your business problem that will ensure that you: 

• understand exactly what you need to do to solve this challenge, and

• shift your perspective to propel you into action. 

They don’t call me the business fairy godmother for nothing. 

Stop holding yourself back and wasting money trying to solve this problem on your own. 

I’ll help you free up time and bandwidth – and save money! Book your session with me today!

Looking for longer-term coaching support: Click here, and let’s discuss the benefits of longer-term 1:1 coaching.