What’s the cost of not changing?

May 24, 2023 | Business

This is one of our favorite questions to ask when we first talk to a fabricator looking at software. It’s an important question, and one that can be applied to any part of your business.

Let’s face it – as humans, we all get into a comfortable groove and it’s hard to change it up. Even if we know things could be better if we did!

So how do you know for sure when it’s time to make a change to the way you run your business? Let’s discuss.

Do you understand your processes?

The first step to knowing when a change is worth the effort is to know how your shop runs from sales to install. By understanding each step, you’ll understand where your bottlenecks are and where there are opportunities to save time, money, and energy.

For example, if you aren’t tracking your sales, you don’t know who is selling the most, what material is selling the most, and what is keeping you from making more sales. These insights will ultimately reveal where in the process things need to change.

Basically, you need to know what you are currently doing so that you know what is working and what is not working.

💡Here’s how to start getting key insights at your shop

What does “cost of not changing” mean?

Simply put, if you didn’t change anything from the way you are doing things now, what money are losing? Keep in mind, sometimes the answer to this is “not enough money to warrant a change.” Other times, it helps you understand that investing in that new machine, new software, or adding a new employee can help you save money and increase your profit in the long run.

Back to the sales example – If you find that there is a trend of inaccurately pricing materials on your team’s quotes, the cost of not changing here is that you will continue to lose profit to these mistakes. Ouchies…

💡Inaccurate pricing affecting you? Check out CounterGo!

Love a good math formula?

Personally, I’m terrible at math so I can’t confidently say this stuff without giving credit where credits due. Some fancy economist with a math degree went out and came up with a real formula to help you – business boss who likes to see numbers – calculate whether it’s more cost effective to change or stay the same. Get your calculators out, it’s a party ya’ll!

Cost of no change (CNC) – Cost of change (CC) = Perceived value (PV)

The cost of no change is basically how much it costs to do the specific process you are thinking about changing up. Think about equipment costs, labor, utilities, materials, etc.

The cost of change is how much it would cost to run that specific process with the changes in place. This number should also include any recurring charges that would be added, like a subscription fee for new software, for example.

The difference between the two numbers is the perceived value. The bigger the number, the more beneficial the change will be. If the process with adding estimating software is less money than the process with no software but with regular miscalculation mistakes, then it is worth it.

Are you ready to change?

Change isn’t easy, but it’s necessary if you want to succeed — and that tidbit of advice works for more than just your countertop fabrication business! Yes, it takes time and money to change your processes, but don’t think of it as a cost. It’s an investment. And some investments pay off big in the long run.

Sometimes the cost of staying the same greatly outweighs the cost of change. So don’t keep doing the same old thing just because “it’s what you’ve always done.” Take a good hard look at your operation and find places to improve. Change might not be easy, but it’s often worth it!

And, if you want to start with your quoting process – we’d love to help you! Schedule some time with us to see if CounterGo can help you change your business for the better.