Making Positive Business Choices

If a financial advisor recently suggested to you that you need a TCO calculator, you may be looking at him/her as though he/she has snakes for hair. Then you would probably laugh it off and change topics before taking a moment to quietly google "TCO calculator." After you know what it is, you would want to know why you would need one. Here is an explanation of what this application is and how it can help your business in several ways. 

The TCO Calculator

TCO stands for "total cost of ownership." A "calculator" of TCO, then, is an application on your mobile devices or your computer that helps you assess what the total cost of ownership for anything really is. For example, if you wanted to know the TCO for a delivery van for a courier business, you would need to know more than just the purchase price of the van. You would need to know the cost of taxes, registration, insurance, gas to operate it every month, etc. Punching in all of those numbers shows you exactly what it would cost to purchase and use a van for deliveries. 

How This Simple (and Often Free) Application Helps Small Businesses Like Yours

If you did not sit down and use a TCO calculator before jumping into business with both feet, you may be struggling now. It is probably why your financial advisor told you to get and use such an app. He/she was probably concerned that you needed to look at the total expense of running your business and that you are running into trouble now because you did not know or realize that there are other expenses involved. It is not too late to sit down and add in the expenses you did not know about before and some ongoing expenses you forgot to add in when you asked for a business startup loan. 

As your business continues, there may be other things you want to buy to help the business grow. However, you have to figure out if purchasing these items would be cost-effective or another major financial burden to you. Turning to the TCO calculator again, you can figure out if the expense would be worth it or if the expense would break your bank and ruin what you are trying to do. (The delivery van in the example above is one such item.) Expanding your business to new locations and new branches is another thing for which to use the TCO calculator before rushing ahead.