Sunk Cost is the idea that once we’ve paid for something, the price we paid becomes irrelevant. But it’s one of the hardest ideas to apply. Don’t we all have that expensive suit in the back of the closet that doesn’t fit right? We paid so much for it that we just can’t part with …
Zero-dollar bills don’t seem to be worth much; but they’re handy for some transactions. It’s a good tool to have in your belt. Let’s say you purchased an item for a job; the charge has already been applied to the job; and then you discover a defective item. You receive a credit from your vendor; …
Are your estimates too low? Customers understand that an estimate is an estimate and the actual cost might be higher. But if you’re estimating too low on a regular basis you should really find out why. Let’s take a good look at what’s going on. Run a report of “estimate vs actual” for individual jobs; …
Sometimes it’s obvious whether something is an asset or an expense. A car is an asset; paper clips are an expense. But what about those lower priced but important items? How about a laptop? That new drill? An asset is an item used in the operation of the business for at least a year or …
Marginal changes are more important than we like to think. As business owners, and as humans, we should have a plan. But it doesn’t have to be earth-shattering. As a matter of fact, it shouldn’t be. Like proposing marriage on a first date, grand changes are risky. Marginal changes allow us to make a small …
Expense receipts don’t seem that important. At least not until the pile leans so far over that it needs a windbreak. And no, a shoebox is not a good idea. That pile of receipts just gets bigger and less appealing. The bigger it gets the less you want to deal with it. And just to …