Cost Benefit Analysis template
Ayoa’s Cost Benefit Analysis template will help you to make more informed business decisions by assessing the pros and cons, so you can determine the right course of action.
What is a Cost Benefit Analysis?
A Cost Benefit Analysis (sometimes shortened to CBA) is an analytical tool that can help you ensure that every decision you make for your business is the right one. Perfect for managers and project leaders, this type of in-depth analysis will enable you to make more informed and justified decisions by assessing the pros and cons of a business proposal. A CBA will require you to determine the effort required to implement specific actions, and analyze whether this outweighs the potential rewards they could bring.
Our Cost Benefit Analysis template is split into four categories to help you determine the effort and rewards associated with a specific business decision. These are:
- Administrative tasks (high effort/low reward)
- Standard workflow tasks (high effort/high reward)
- Gimmicks and novelty tasks (low effort/low reward)
- Delightful feature tasks (low effort/high reward)
Why should you use a Cost Benefit Analysis?
A Cost Benefit Analysis can be used to help you to weigh up the pros and cons of any decision that could have an impact on your organization, such as introducing a new product or service, changing suppliers, expanding your team, or branching out into additional advertising channels. For this reason, this type of analysis can be used by teams in any department within a business, as well as Directors, CEOs, and other key decision-makers.
No one wants to be the reason their business uses valuable time, money and other resources for little return. By analyzing the potential benefits and costs of a decision before making it, you can decide if it’s worth going ahead with. You can then adjust your business proposal to ensure that the benefits outweigh the costs, or rule it out completely. In some cases, you will find that you have no choice but to incur some costs, and the CBA will help you to determine how long it will take to repay these costs and make a profit. This will help you to provide justification for any decision to key stakeholders.
How to use our Cost Analysis template
Our Cost Analysis template will enable you to weigh up the pros and cons of every decision, as well as determine the effort and rewards for each action included as part of a business proposal. Discover how to use our template below.
To access the template, sign up to Ayoa. Once you've signed up, navigate to the homepage to create a new whiteboard, mind map or task board and choose this template from the library.
Decide which business decision you want to analyze, then brainstorm the tasks that will need to be completed if you decide to go ahead with this decision. Begin adding these to the template using sticky notes, so they can be organized into the different sections of the template later. Don’t forget to make a note of any potential costs and benefits they might bring.
Tip: Remember that costs won’t always be related to money – it could also be time and other resources.
Move each sticky note to the ‘administrative tasks’, ‘standard workflow’, ‘gimmicks and novelties’ or ‘delightful features’ sections of the template, depending on which category it falls under. You might find it helpful to consider the costs and benefits you’ve already outlined to determine where each task should sit.
Now it’s time to figure out the monetary value of the costs and assign them to each task. For example, if you need to hire additional employees, approximately how much will this cost your business? Consider aspects such as salaries, buying equipment, and the time needed to train new hires.
Now you need to assign a monetary value of the benefits associated with each task or action you outlined. Although you can try to estimate the potential revenue they could bring, you should also consider other values that can be generated for your business, such as positive associations with your brand or increased staff morale.
Compare the costs and benefits of each of your costs and benefits. Does one clearly outweigh the other? Could you justify the costs based on how long it might take to repay them? Use this to help you make a justified decision.
