Thursday, June 25, 2009

Cost vs Value

When considering any purchase the following words by respected poet and philosopher John Ruskin (1819 - 1900) are as relevant today as when he wrote them :
"It's unwise to pay too much, but it's unwise to pay too little. When you pay too much you lose a little money, that's all. When you pay too little you sometimes lose everything, because the thing you bought was incapable of doing the thing that you bought it to do. The common law of business prohibits paying a little and getting a lot..... it can't be done. If you deal with the lowest bidder, it's well to add something for the risk that you run - and if you do that you have enough to pay for something better."
Oscar Wilde wrote:
Nowadays people know the price of everything and the value of nothing.
When you look at a purchase, do not look at the price, look at the value you will get from the purchase. For example, if you are looking at a Vectorworks upgrade, how much time will it save you? if Vectorworks 2009 is easier to use and saves you 4 minutes a day (or 1/2 a minute per hour), what is the value of that? There are about 2000 chargable hours a year, so that works out to be a saving of 16.7 hours/year. if your change out rate was $100/hour, that’s a return of $1670.00. Combine the upgrade with my online training and gain 10 minutes a day. 1.25 minutes per hour, 2000 chargeable hours, 41.7 hours, @$100/hr = $4170.00 return. Can you afford to NOT upgrade?

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