THE "COST VS. SAVINGS" SERIES 3: THE WORKINGS

 

THE 

"COST 

VS. 

SAVINGS"

SERIES 3: 

THE 

WORKINGS  

Hi there,

Trust you are doing great and I guess the summer is "summing up" 😄

Can I have your attention before you get carried away again?

Just so you know, I'm taking a series titled The "Cost Vs. Savings" Series. It was inspired by a conversation with someone on matters relating to safety consciousness, but has now transitioned into a discussion packed with insights that will help you make better decisions on your project.

In my last post, I defined fundamental terms and drafted a personal statement that summarises the entire series into 3 lines you can memorize 👇

❌ If it would cost me money, time and effort but rescue me from nothing, I DROP IT

🤔 If it would cost me money, time and effort and rescue me from something , I CONSIDER IT 

✅ If it would NOT cost me money, time and effort yet rescue me from something, I JUMP AT IT

Feel free to apply these statements as a guideline on your projects moving forward.

Now that you know what Cost and Savings means, let's delve into how to work them out 👇


#1: 

GET THE  

NUMBERS 

 RIGHT 

I promised not to bore you with serious calculations, so here are some basic formulas you can deploy to obtain cost-savings 👇

Absolute Savings: Original Cost - New Cost

Percentage Savings: Original Cost - New Cost ÷ Original Cost x 100

ROI (Return on Investment): Net Benefit ÷ Project Cost x 100

Where:

💰 Original Cost is the total amount of money initially paid or budgeted for an asset, project service, or product.

🆕 New Cost is the final amount of money you pay after an asset, project service, or product has been delivered.

🥅 Net Benefit is the final value you gain from a decision after subtracting all associated costs from the total rewards. 

🏗️ Project Cost is the total amount of money required to complete a project from start to finish.

Are you still there? 😆


#2: 

CREATE 

A 

NARRATIVE  



Allow me deploy a Nigerian expression "who numbers epp?" 😆 (meaning what help do I get from knowing the numbers?). 

Perhaps this sounds like the thought running through your head right now, and it's actually valid in situations where numbers are not really needed. 

Narratives come to fur where numbers are difficult to obtain or meant to be discreet. So it's okay to switch to narratives, just be sure they are true and verifiable. For sake of clarity, here are some examples of what a narrative could be:

✔️ Direct reduction: For instance, lowering current bills or purchase prices and putting immediate savings back into the budget.

✔️ Upfront investment: This could be a decision to incur more cost initially, so as to attain high-quality delivery that eventually creates larger long-term savings.

✔️ Cost avoidance: This is more like stopping future price increases to protect budgets from growing, even if current spending does not drop.

All of these are narratives that may not have numbers per se, but that doesn't invalidate the value they present to your project.

Do you get it? 🤔 


#3: 

DO 

AN  

ASSESSMENT  


This video by a colleague in the design and build industry drives my point home. Here he compared the cost of electricity for two models of air-conditioning unit deployed on the same property, a smart project decision case study we all should learn from 👇

https://youtube.com/shorts/FcpvPk7JA2Q?si=SaNJuKc8b1lZNomc

Here is a classical example of how to balance numbers with narratives. Assessments like this will fly in a board room and on the street.

Thumbs up @sirfolajomi, I hope to have you feature on a Consult Kenny Post someday 🫡

So while you still trying to digest today's post, let me help you sort your ongoing and upcoming projects. Simply click on the link below to get in touch👇

https://wa.me/message/O35ITJCXPTGYG1

See you on the next one 👍

I'm Kenny, an interior designer and project manager


CONSULT KENNY

PROJECTS | PEOPLE | PLACES | PLATFORMS

#consultkennyposts #thecostvssavingsseries3 #theworkings #getthenumbersright #createanarrative #doanassessment #summer #retunoninvestment #Nigeria #sirfolajomi #electricity #airconditioning

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