Money Jargon That Matters

• CODB
• TCO
• ROI
• COA

Cost Of Doing Business

• The money you must spend each month, even if you do no business whatsoever
• You must make more than this in order to reach a margin of profit
• Gross Revenue - CODB = Profit (this is a very simplified formula!)

Reducing CODB Increases Profit

• Lower utility costs, travel expenses, unneeded luxuries
• Increase efficiency - follow up faster, close sales quicker, with fewer "touches"
• Raise Your Prices!

Startup Costs are TAX DEDUCTIBLE!

• Analysis/survey of potential markets, products, labor supply, transportation facilities, etc.
• Advertisements for the opening of the business.
• Salaries/wages for employees who are being trained and their instructors
• Travel and other necessary costs for securing prospective distributors, suppliers, or customers
• Salaries/fees for executives and consultants, or for similar professional services

Total Cost of Ownership

• What it costs to purchase, install, configure, maintain and service equipment required to run your business
• Includes software training costs, hardware upgrade costs
• Includes peripherals like toner cartridges, backup tapes, storage and transport costs, etc
• Includes warranty costs and out-of-warranty service costs, subcontractor costs, et al
• Includes loss of productivity due to system/service outages, "hold time" waits on support calls, etc

TCO Tips:

• ALWAYS get the extended warranty!
• ALWAYS register online if possible
• Know what is/isn't covered in the warranty
• Ask if training is included in the purchase price, if at all
• Ask if updates/upgrades are included in the purchase price
• Keep receipts, serial & registration numbers safe and at hand

Return On Investment

• The benefit to the investor as the result of an investment of, or in, a particular resource
• A profitability measure that evaluates the performance of a business by dividing net profit by net worth
• How much bang you get for each buck you spend

ROI Questions

• What is the lifetime cost?
• What are the hidden cost?
• Lease vs. Buy - are there advantages?

Cost Of Acquisition

• The maximum cost a business is willing to pay to acquire a new customer
• Includes product/service delivery cost, marketing & advertising costs, social media/email campaign costs
• Business cards, business networking (travel & registration), business lunch/dinner meetings
• The cost of your website hosting, domain name registration, SEO/marketing consultants' fees, CRM/ERP software costs

Everything is already data

• Your credit cards don't "track your spending habits" - they provide a historical record of your financial activities
• Even your cash is now plastic (Debit cards: when was the last time you went to a teller to make a withdrawal?)
• Unprocessed data has no value - it's like an uncashed $1,000,000 check

It's All in the Numbers

• You can analyze expenditures by date/time, location
• You can group expenses by category, job or customer
• You can relate deposits to invoices to reconcile accounts and determine lifetime value of clients
• You can connect invoices to payments to discover who pays the fastest/slowest. This knowledge helps you to manage your cash flow

Put it on the Plastic

• STOP SPENDING CASH! Card transaction provide an automatic record full of information that helps you manage your financials
• Professionals don't pay cash. Cash is hard to track or verify. Startups need to keep track of every dollar spent
• Get a proper business card. Some debit cards (BofA, Chase, U.S. Bank, PayPal) give you cash back on your cash spending