A Practical Discussion of Cost vs. Value

Weighing cost vs. valueSo I haven’t sent out a post in the past few weeks because things have been a bit crazy— I bought my first house and it has been a messy process. I think everything that could go wrong did, but we are finally up and running. If you’re ever looking for a good laugh let me know and I’ll share the details with you.

In light of the craziness that has been my last couple weeks I wanted to write a short post this week on value. More specifically, cost vs. value. I think this is a huge concept that people, especially those in business, need to understand better.

So what is the difference between cost and value? Cost is something that requires a payment, and value is something of importance or worth. If this seems obvious then why am I asking the question? I think too many times we focus so much on the cost of something and lose sight of the value. But when you think about it, isn’t the provided value the thing that really matters? In other words, if something provides twice the value of the asking price, it would be well worth the investment.

I see too many occasions where business owners only focus on the cost of something and completely lose sight of its value. To explain this more clearly, I want to briefly discuss this in relation to my business, because after all, that is what I know best.

At Quantify, we provide clients with outsourced accounting and controller solutions. Half of the work we do is insuring that the financial statements of companies are accurate. The other half we spend using those financials as a tool to help people grow their businesses. Obviously the second half of this purpose statement is where the value comes in. Let me preface this by saying that value is hard to quantify many times (sorry I had to). Potential clients ask me all the time what value we can bring them and that is a hard question to answer. Not because I don’t think we can bring value (I am very confident in what we do) but because every client, and scenario, is different. The value we bring to every client is a little bit different and that’s okay. Life isn’t static. The point being, as long as the value that we bring our clients outweighs the cost, everything is good. If a client does not know their core values then they shouldn’t even be looking for ways to spend their money.

This is just one example of cost vs. value. Why am I telling you this? I want you to truly consider the cost AND value of your future transactions. Many times the things that cost the most also bring you the most value. Obviously the price tag is really important but don’t make that your one and only focus. Really dig deeper and see the value that something can bring to you. Not only can you use this principle in your professional lives but also in your personal lives as well.

I know there isn’t a ton of information in this post; I just wanted to go below the surface with you. I would love to hear your feedback on this post, and any posts I have written in the past or any topics that you would like me to cover. Interacting with this material and these concepts is how we start to make it our own. Feedback and dialogue is more than necessary.

Don’t just let the price determine value, know what you need, know what you want.