Are we being honest?

Understand why the customer will buy your product and how the Final Decision Maker will justify the release of funds to pay for the product. Most Final Decision Makers of large value purchases will have a Return on Investment (ROI) and/or a Breakeven Analysis mentality and justification. Let's look at how we can provide this information to help us close the business.

There are numerous ways quantify the value in currency that the solution will provide. The key is to be able to put a number in dollars or pounds for example, so that the Final Decision Maker can see what he's getting for his investment. This is the Return on Investment.

One way to analyse this is to look at what the cost is to do nothing. This is the cost of business as usual. Sometimes this cost can include annual maintenance, support, time of people costs, inability to focus on other things needed to be done (opportunity costs) etc.

So put it in a spreadsheet. List all the costs of doing nothing and put a currency figure to it, and then list the cost savings and increased productivity, market share, and increased income or revenue produced from your solution.

This analysis shows that the cost of doing nothing over 3 years is 271,500, but the solution benefits are 395,000, therefore, if the solution itself only costs 50,000 for example, the solution will pay for itself in Year 2 when the solution would have had a return of 35,000 + 39,500 when it only cost 50,000.

Costs of Doing Nothing	Year 1	Year 2	Year 3	Total
Waisted Time of Employees	25,000	25,000	25,000	75,000
Lost Sales	50,000	50,000	50,000	150,000
Maintenance	10,000	10,500	11,000	31,500
Support	5,000	5,000	5,000	15,000
Total Cost of Doing Nothing	90,000	90,500	91,000	271,500
Benefits of Solution
Increased Sales	75,000	75,000	75,000	225,000
Improved Market Share	25,000	30,000	40,000	95,000
Time Savings of Employees	25,000	25,000	25,000	75,000
Total Value of Solution	125,000	130,000	140,000	395,000
Return on Investment	35,000	39,500	49,000	123,500