Monday, July 20, 2015

Use a Dummy to Prove a Negative

Business people evaluate decisions based on the return on investment. Showing an ROI requires you to monetize the value of the benefit. But sometimes the benefit is the avoidance of problems. How can you monetize the value of something that has not happened?

Use a dummy, made up situation to make your point. The process of walking through the potential savings helps prove the negative. If the likelihood of the situation occurring is strong, it will not be a stretch to get a client to assign a monetary value to that situation. For instance, if you charge $25,000 to develop an employee manual, you should be able to make up a reasonable story of a situation that could go wrong. Use this example to demonstrate how the training and policies developed in the manual can avoid the potential costs associated with not having the manual.