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Don’t Get Ripped Off! You Must Do This Before Signing Up To Your Next Business App

Software Business Case

Let’s face it. A good sales page can be amazingly good at convincing you that you must absolutely have this product/service and that your life will now be awesome. If you have a problem that the offered solution fixes, it can be very enticing to jab the keyboard and sign up.

Alternatively, you may look at the price of an online tool, and think “I’m not paying $6 a month for that!” and move on to the next thing.

The problem with these two approaches is that it isn’t based on any facts other than what you’re thinking/FEELING at the time, IF you haven’t done your homework.


Why you must do a simple business case!

The best way to avoid signing up to an online tool you may not need, or missing out on fantastic value, is to spend 5 mins and create a business case.

Simple is best here, and what I mean by a business case is simply quantifying how much a problem is worth to you, or how much a problem is costing you.

Once you know clearly what this is, you can easily assess any solution quickly both from a cost and feature perspective.


So how do you create your business case?

I like to break it down into 3 parts.

For a simple example of a problem that needs fixing, we’re going to use the case of a $70 per month subscription that has been forgotten.

Part 1

What is the time cost?

To calculate the time cost, simply add up how much time you might spend on this problem over a year. Think carefully about this one. It’s not just the time you actually spend working on the problem, it may be the time you spend on the phone sorting it out, waiting to hear back from someone, or the time one of your employees spends on it.

In the case of a forgotten subscription, it may be the time spent looking through your bank statements to figure out how many months you’ve been paying for it, then the time spent online cancelling the subscription, then emailing or being on the phone to the provider to negotiate getting your money back. Let’s use half an hour each month for two months until the cancellation and refund is completed.

Once you have the number of hours you spend on the problem, simply multiply it by an appropriate hourly rate to create a dollar amount. Let’s use $30 per hour. So the time cost value for this one forgotten subscription is $30 for the year.

Time Cost calculation for business case

One thing to note here, is that if your time cost needs to be calculated every month over the year (not the two months in our example case) , you need to multiply your time cost by the number of months.

Part 2

What is the real money cost?

The real money cost is the actual money you have to spend because of the problem over a year. In the case of a forgotten subscription, it’s simply the cost of the subscription that has been paid. However, it’s worth noting it may not just be 1 months’ worth. What if you forget to cancel over multiple months and pay a number of times? It’s important to think realistically about this as much as possible.

In our example it’s $70 per month. Let’s assume that it’s been forgotten 2 months in a row before the problem is solved. The real money cost would be $140 per year.

Real Cost calculation for business case

Part 3

What is the sacrifice cost?

The sacrifice cost is what could you have been doing instead of working on this problem over a year. What could you have achieved with the time/money spent dealing with this problem if it could have been spent on another area of your business or life.

In our example of the forgotten subscription, I would look at what you could have achieved with the $170 (Time Cost $30 and Real Cost $140) if you’d spent it elsewhere. Let’s assume you could have spent this amount on advertising that created another customer for your business. You then have to work out what this customer would be worth to you. Let’s say it was $200 for the year.

This part is very much associated with your specific business. Maybe in your own business, you could have obtained far more customers than in our example, so this sacrifice cost can add up really quickly.


Once you have quantified these three areas, simply add them together to get a yearly value of the problem. In our case it’s worth $370. We still have something else to consider here as we’ve only acknowledged the value of the one subscription. If you have multiple subscriptions, then the value could be much higher.

Now that you have the value of the problem, you are now in the position to go hunting for the solution – armed with a budget of $370 per year!

When you’re looking at solutions now, you will know how much you can spend to make it better value than the current cost. If a solution costs more than the value you’ve calculated the problem is worth, then the solution is not worth implementing.

If it’s less, make sure its significantly less. Adding another piece of software to your business that only makes a small incremental value change, is probably not worth doing either.

By following this process each time you go hunting for a new tool (or each time you think about signing up to that awesome deal), you’ll always know you’re making your decision with confidence. Ensuring you get real value for money, every time.


Gabe Alves | Founder of TrackMySubs

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