Great example of why I need this blog - because my mind gets all dusty and mushy on some concepts... take our last concept, opportunity cost lesson 2. I had said that one apple made 3 times the profit of oranges and that the equation for that would be x = 3x.
WRONG!!!!
An apple is not an orange and if you matheletes are paying attention, you will realize that one of something cannot be equal to three of the same thing (unless its the Trinity:)) SO...
X is for Apple
Y is for Orange
and X = 3Y, which means that one apple profit is the same as 3 orange profits.
In business you often hear the term "apples to apples comparison" to describe SWOT. Comparing like items or enterprises is the best judge of your item or enterprise. You wouldn't compare your newborn and your 4 year old in terms of who talks back the least because then you'd be really down on the older one. Same concept.
Wednesday, May 18, 2011
Tuesday, May 10, 2011
Opportunity Cost Part 2
OK, so now that you know that opportunity cost is this for that, you need to know what is the best that you can get for your this.
In mommy words, here it is: you have 3 hours without the kids but no access to a car. How do you spend it? TV is relaxing... housework is work but whittles down that to-do list... a nice bath is relaxing but after 3 hours cold... surfing online can be fun but like TV, the after effects make one feel wasted. Eating that favorite dessert without paws reaching in is also nice. There are so many things... what is the best way for you to spend it? Well, thats going to depend on you and your situation. Its that work-play balance again. So much of a certain play is going to cost you so much work and the accompanying stress that comes from not doing it.
In business terms, you can sell apples or oranges. Apples make twice the profit of oranges (so oranges are X and apples are 2X.) So your profit equation is X+2X=Profit.
Doing all apples will cost you your orange labor and profits... which is fine if there is no market for oranges. But what if oranges sell more units than apples (they are eaten more at a certain blogger's household.) Lets say people buy 3 times as many oranges as apples. Now, X apples = 3X oranges. At that point, it is worth your trouble to also sell oranges, simply because your profits may end up exceeding apple profits as a total. So you want to make the most profit out of both oranges and apples.
These equations are called 'constraints.' One would phrase the question, what is the opportunity cost of selling one additional unit of apples?
OK, so its almost dinner, nothing's started, the baby is about to cry, I am hungry, Sesame Street is on and math is not my strong point... I am going to finish this when I can better focus on it... you can see why companies do not encourage bringing your 4 year old, 1 year old and your newborn to work. I promise you a good sequel to this post! Point is, you want to maximize your profit within the given constraints of your market and your product. Baby's crying. See you later!
In mommy words, here it is: you have 3 hours without the kids but no access to a car. How do you spend it? TV is relaxing... housework is work but whittles down that to-do list... a nice bath is relaxing but after 3 hours cold... surfing online can be fun but like TV, the after effects make one feel wasted. Eating that favorite dessert without paws reaching in is also nice. There are so many things... what is the best way for you to spend it? Well, thats going to depend on you and your situation. Its that work-play balance again. So much of a certain play is going to cost you so much work and the accompanying stress that comes from not doing it.
In business terms, you can sell apples or oranges. Apples make twice the profit of oranges (so oranges are X and apples are 2X.) So your profit equation is X+2X=Profit.
Doing all apples will cost you your orange labor and profits... which is fine if there is no market for oranges. But what if oranges sell more units than apples (they are eaten more at a certain blogger's household.) Lets say people buy 3 times as many oranges as apples. Now, X apples = 3X oranges. At that point, it is worth your trouble to also sell oranges, simply because your profits may end up exceeding apple profits as a total. So you want to make the most profit out of both oranges and apples.
These equations are called 'constraints.' One would phrase the question, what is the opportunity cost of selling one additional unit of apples?
OK, so its almost dinner, nothing's started, the baby is about to cry, I am hungry, Sesame Street is on and math is not my strong point... I am going to finish this when I can better focus on it... you can see why companies do not encourage bringing your 4 year old, 1 year old and your newborn to work. I promise you a good sequel to this post! Point is, you want to maximize your profit within the given constraints of your market and your product. Baby's crying. See you later!
Monday, May 9, 2011
Opportunity Cost
This boils down to the question, "What will this cost me in terms of not-money?"
Sounds confusing and it is at first.
In mommy terms, I can feed my tot candy and shut them up for 15 minutes after lunch so I can do the dishes. Candy for short term peace. But candy will also cost me, in terms of cavities and the child's expectations. And behavior issues from the high fructosity. No dessert will take away those expectation but also take away some of my time to do dishes and some of my 'nice mommy' points. Fruit is a good compromise...
Anyways, I digress. There's only so much of any one resource. Take labor. There are only so many laborers in the country. If the US shut down all industry but automaking, there would be no one in the country to make food and prices of that commodity would increase (even more so than they do.) If people only labored in food production, there would be no one to educate our children. A teacher cannot teach and produce food at the same time (or devote their full resources.) Or they can produce food well but only if they give up some of their teaching time. An acre of corn will cost a teacher 3 hours of class time. When discussing opportunity cost, do not get bogged down with details such as multitasking and monetary issues. Look at it as an exchange of goods.
Translated into pure cash perspective, though, its having $10 to spend on anything you want. You could get 3 Starbucks drinks or 4 McDonald's coffee drinks. You could get 2 gallons of gas. You could buy an hour of babysitting. But you cannot buy all of the above with just $10. That resource is limited.
Translated into time, you have an hour without children. You can do laundry and dusting, you can catch up on TV you've been recording, you can read that novel you haven't been able to finish, you can take a hot bath, you can nap... bu you cannot do it all... spring cleaning may cost you a nap. Or a nap will cost you dusting 3 rooms.
Agrarian countries are having trouble with this at present. At one time they mainly grew and sold food. But with populations and high paying jobs moving to cities (think China) there are fewer workers available to produce food. This creates a shortage of food in the country, overall. More educated workers are costing the nation in skilled farmers. This is directly affecting their need to import foodstuffs and export goods and services that other countries need.
I think stay at home moms have a better grasp of opportunity cost than most. Staying at home, you get time with your kids when they're little, something you can never recover. But you lose points, professionally, and you gain gaps in your resume. However, you also have less stress from having to 'do it all' because you discover thats just a myth anyways:) Even moms who work from home, like me, can point to their opportunity costs. I can make a pair of baby booties for $15 or I can take an hour and a half nap or clean my house or surf the 'net. But those activities will cost me the pair of booties and the profit from them. Anyone else have examples of this from their lives?
Sounds confusing and it is at first.
In mommy terms, I can feed my tot candy and shut them up for 15 minutes after lunch so I can do the dishes. Candy for short term peace. But candy will also cost me, in terms of cavities and the child's expectations. And behavior issues from the high fructosity. No dessert will take away those expectation but also take away some of my time to do dishes and some of my 'nice mommy' points. Fruit is a good compromise...
Anyways, I digress. There's only so much of any one resource. Take labor. There are only so many laborers in the country. If the US shut down all industry but automaking, there would be no one in the country to make food and prices of that commodity would increase (even more so than they do.) If people only labored in food production, there would be no one to educate our children. A teacher cannot teach and produce food at the same time (or devote their full resources.) Or they can produce food well but only if they give up some of their teaching time. An acre of corn will cost a teacher 3 hours of class time. When discussing opportunity cost, do not get bogged down with details such as multitasking and monetary issues. Look at it as an exchange of goods.
Translated into pure cash perspective, though, its having $10 to spend on anything you want. You could get 3 Starbucks drinks or 4 McDonald's coffee drinks. You could get 2 gallons of gas. You could buy an hour of babysitting. But you cannot buy all of the above with just $10. That resource is limited.
Translated into time, you have an hour without children. You can do laundry and dusting, you can catch up on TV you've been recording, you can read that novel you haven't been able to finish, you can take a hot bath, you can nap... bu you cannot do it all... spring cleaning may cost you a nap. Or a nap will cost you dusting 3 rooms.
Agrarian countries are having trouble with this at present. At one time they mainly grew and sold food. But with populations and high paying jobs moving to cities (think China) there are fewer workers available to produce food. This creates a shortage of food in the country, overall. More educated workers are costing the nation in skilled farmers. This is directly affecting their need to import foodstuffs and export goods and services that other countries need.
I think stay at home moms have a better grasp of opportunity cost than most. Staying at home, you get time with your kids when they're little, something you can never recover. But you lose points, professionally, and you gain gaps in your resume. However, you also have less stress from having to 'do it all' because you discover thats just a myth anyways:) Even moms who work from home, like me, can point to their opportunity costs. I can make a pair of baby booties for $15 or I can take an hour and a half nap or clean my house or surf the 'net. But those activities will cost me the pair of booties and the profit from them. Anyone else have examples of this from their lives?
Monday, April 25, 2011
Term of the Day: Benchmarking
This is business-speak for comparing. Comparing to competitors within the industry. Comparing with similar sized companies. Comparing with similar products.
How are we, in relation to the 'other?'
It seems like something you can communicate easily. And it is if you've done your homework. You will want to know what, exactly, you are comparing. For example, diaper sales in the United States. If you are P&G (Proctor & Gamble,) you may want to know how many diapers you sell in New York City, in comparison to other brands, such as Kimberly Clark. You may compare figures such as profit margin, packs sold, profit per diaper and cost per diaper. You may sell more diapers than Kimberly Clark (i.e. Huggies) but yours cost more to make so your profits will be equal to or less than your main competitor. Benchmarking yourself to your competitor is vital to discovering how to beat them.
Being an avid diaperer, I currently use whatever brand sends me their coupons. My stash is currently Pamper-heavy but that changes with the sales. At any rate, Pampers hold waste longer than the Huggies, although Huggies sell you more diapers for less per diaper. It evens out. At the beginning of the month, I may spring for Pampers Swaddlers for my newborn, simply becuase they seem softer to me. But otherwise, they are pretty equal. If Pampers suddenly created a diaper that held the same but met or beat Huggies price, I would buy more Pampers with or without a coupon. They would do well to analyze something like this.
At that point, Pampers would have set a new benchmark. This is also akin to setting goals. Let's assume my toddler wets his pants 6 times a day (I wish.) First, I track how many times to make sure it really is 6 and not more or less. I do not with to inflict more of my goals on him than are fair. Then after tracking diapers several days, I find that, OK, 6 is pretty accurate. Once this is done, I go online and several sources tell me that if he's meeting all the milestones appropriately, he should be able to go tinkle on the potty at least 4 of those 6 times. Now I will start trying to sit him down and reward him or offer rewards for success. My benchmark is only 4 accidents. I can try to potty train in a day - and I've heard of successful instances - but its far more realistic a goal/benchmark.
Companies may go "all in," attempting to go far above and beyond the current benchmark. Like a casino, there are a few really big wins (think Apple's iPhone) but there are many many more losing machines. Benchmarking in business and in potty training will save you and your kids and your business many many tears.
How are we, in relation to the 'other?'
It seems like something you can communicate easily. And it is if you've done your homework. You will want to know what, exactly, you are comparing. For example, diaper sales in the United States. If you are P&G (Proctor & Gamble,) you may want to know how many diapers you sell in New York City, in comparison to other brands, such as Kimberly Clark. You may compare figures such as profit margin, packs sold, profit per diaper and cost per diaper. You may sell more diapers than Kimberly Clark (i.e. Huggies) but yours cost more to make so your profits will be equal to or less than your main competitor. Benchmarking yourself to your competitor is vital to discovering how to beat them.
Being an avid diaperer, I currently use whatever brand sends me their coupons. My stash is currently Pamper-heavy but that changes with the sales. At any rate, Pampers hold waste longer than the Huggies, although Huggies sell you more diapers for less per diaper. It evens out. At the beginning of the month, I may spring for Pampers Swaddlers for my newborn, simply becuase they seem softer to me. But otherwise, they are pretty equal. If Pampers suddenly created a diaper that held the same but met or beat Huggies price, I would buy more Pampers with or without a coupon. They would do well to analyze something like this.
At that point, Pampers would have set a new benchmark. This is also akin to setting goals. Let's assume my toddler wets his pants 6 times a day (I wish.) First, I track how many times to make sure it really is 6 and not more or less. I do not with to inflict more of my goals on him than are fair. Then after tracking diapers several days, I find that, OK, 6 is pretty accurate. Once this is done, I go online and several sources tell me that if he's meeting all the milestones appropriately, he should be able to go tinkle on the potty at least 4 of those 6 times. Now I will start trying to sit him down and reward him or offer rewards for success. My benchmark is only 4 accidents. I can try to potty train in a day - and I've heard of successful instances - but its far more realistic a goal/benchmark.
Companies may go "all in," attempting to go far above and beyond the current benchmark. Like a casino, there are a few really big wins (think Apple's iPhone) but there are many many more losing machines. Benchmarking in business and in potty training will save you and your kids and your business many many tears.
Thursday, April 21, 2011
Term of the day: CSR
This is a term like 'synergy,' that will make you look smart. It is more commonly used in large corporations but more and more smaller businesses are adopting it.
CSR: Corporate Social Responsibility. I thought it a good term to explore in lieu of tomorrow being Earth Day. Tomorrow is another more important day for me but its not very pc to mention so for blogging intents and purposes, tomorrow is Earth Day.
CSR is an umbrella term for the company's charitable giving, either in the form of monetary donations or fundraising efforts (sponsoring a team to walk a 5K for MS, building a hospital wing, cleaning oily birds from the Gulf spill, etc.) There's not too much funny stuff I can contribute here but I'll do my best!
CSR can be a verb or a noun. Verb: We will want to CSR this charity. Noun: This charity is part of our CSR. CSR encompasses any and all efforts to "give back." Think of your household and its charitable giving. Important ones for us are our church, maternity homes, children and multiple sclerosis research. What are yours? Corporations are able to help causes on a larger scale. And almost all of them have CSRs. Some even have whole departments dedicated to this.
Now, corporations still thrive on profit. So why is the CSR important to them? PR, or public relations. You could say they like CSRPR, FYI, BTW. That should get an LOL:) Earth day ties in because environmental causes are a HUGELY popular CSR. Companies are more and more concerned with their carbon footprint so if they are connected with a business that affects the earth (Proctor & Gamble = diapers = landfills) they try to give back (cleaning oil spill affected animals with Dove soap.) If they do not affect it as much, it is still a popular cause that the majority of companies serve.
Why is CSR important to you? Well, the first thing is that good little 'company girls' like what the company likes. Second, or maybe first for many people, is that if you have the luxury, you will want to work for someone who supports good things. There are some causes that are divisive; nuclear research comes to mind. Nuclear power has the potential to do much good but it also has the potential for great destruction, as we have seen in Japan. Any money you make for your corporation is partially funded into their CSR. So your efforts indirectly contribute to the causes your company supports. Scientists who object to embryonic stem cell research often lend their time, money and talents to charities that focus on adult stem cell research only. Every company website today has a link on one of their first web pages, outlining their giving priorities, their CSR. This is important to note, when determining if you will even apply. Your money will make a difference to someone. Make sure it is the difference you want to make.
On a side note, go to Starbucks tomorrow with a mug/travel mug and they will give you free coffee for being environmentally conscious.
Happy Good Friday!
CSR: Corporate Social Responsibility. I thought it a good term to explore in lieu of tomorrow being Earth Day. Tomorrow is another more important day for me but its not very pc to mention so for blogging intents and purposes, tomorrow is Earth Day.
CSR is an umbrella term for the company's charitable giving, either in the form of monetary donations or fundraising efforts (sponsoring a team to walk a 5K for MS, building a hospital wing, cleaning oily birds from the Gulf spill, etc.) There's not too much funny stuff I can contribute here but I'll do my best!
CSR can be a verb or a noun. Verb: We will want to CSR this charity. Noun: This charity is part of our CSR. CSR encompasses any and all efforts to "give back." Think of your household and its charitable giving. Important ones for us are our church, maternity homes, children and multiple sclerosis research. What are yours? Corporations are able to help causes on a larger scale. And almost all of them have CSRs. Some even have whole departments dedicated to this.
Now, corporations still thrive on profit. So why is the CSR important to them? PR, or public relations. You could say they like CSRPR, FYI, BTW. That should get an LOL:) Earth day ties in because environmental causes are a HUGELY popular CSR. Companies are more and more concerned with their carbon footprint so if they are connected with a business that affects the earth (Proctor & Gamble = diapers = landfills) they try to give back (cleaning oil spill affected animals with Dove soap.) If they do not affect it as much, it is still a popular cause that the majority of companies serve.
Why is CSR important to you? Well, the first thing is that good little 'company girls' like what the company likes. Second, or maybe first for many people, is that if you have the luxury, you will want to work for someone who supports good things. There are some causes that are divisive; nuclear research comes to mind. Nuclear power has the potential to do much good but it also has the potential for great destruction, as we have seen in Japan. Any money you make for your corporation is partially funded into their CSR. So your efforts indirectly contribute to the causes your company supports. Scientists who object to embryonic stem cell research often lend their time, money and talents to charities that focus on adult stem cell research only. Every company website today has a link on one of their first web pages, outlining their giving priorities, their CSR. This is important to note, when determining if you will even apply. Your money will make a difference to someone. Make sure it is the difference you want to make.
On a side note, go to Starbucks tomorrow with a mug/travel mug and they will give you free coffee for being environmentally conscious.
Happy Good Friday!
Sunday, April 17, 2011
Change for Dummies: Part II - The Change Agent
So we've established in part one that the best way to introduce change is to ask people to do something small. Why? Change is hard. People who have been around forever like to do things like they've been doing them forever. Newbies just learned the ropes and are reluctant to change their routine. And statistically, 80 % of everyone else in between is too comfortable to switch. The low hanging fruit would seem to be easily enough to implement among your staff. But more is needed. This is where the process requires going back to high school. Yuck, I know. Enter the change agent. This is the person who will cheerlead the change for your. If you work at a corporation, managers implementing change will all need to find one. People respect and like this person because of either experience, personality or any other number of reasons. Who are they most likely to listen to? Think high school: was this the student council president? Maybe, if they were elected by the vast majority because they genuinely were nice. Was it the head cheerleader or the quarterback of the football team. Eh. People like them but are usually scared of them or intimidated in awe (haha:)) Some of these people could be jerks/bitches but not always. They did have great hair/clothes which won some points. Probably best to stay away from the AV club nerds though they are usually very very nice. They get a lot done but have bad hair and sometimes BO problems. In work. I'm serious. Partiers are fun but usually offend someone when they are under the influence. People in my class could convince us of much but we also knew they wouldn't follow through because they were too "fun." Whose word has the most "cred" in your school? This might be an easy job. There might be an obvious choice. But be careful. Just because someone is a social leader or your friend does not mean everyone listens to their business savvy. Social cred is equally as important as business cred. Here are some places to look for your change agent or to double check, if you think you are sure of who they are. 1. Secretaries, er administrative assistants. (I say this with a wink because I was one.) These people work with EVERYBODY. They usually know EVERYTHING and most have to possess at least pleasant personalities and competence because they do everything for everyone. Not high on the totem pole, an excellent administrative assistant often commands a lot of respect. 2. Old, er, experienced people. Not all of them. Ones with a proven record of success and hard work. And not crochety ("when I first came here, we worked up hill, both ways.") Experience gets automatic points with co-workers. 3. Map the cliques. Work has cliques, just like high school did. Write them out. If there are any people who aren't easily classified or who fit into more than one, consider them. Some people just get along with everybody because they are nice people but if they are at an office and this happens, it is also because they are respected for their work. And then some people are crabby when your computer breaks and they have to come fix it and they grump about it the whole time and they don't wear deodorant (you know who you are, former IT guy whose name will not be mentioned.) 4. Everyone else. Maybe there's someone in a definite clique who just has the respect. Reminds me of C in high school. C was a woodshop guy, a partier, a C student. Definitely ran with that crowd. But he was also incredibly nice. And not a mean drunk when he partied. And helped the slow kids in the halls. Well, don't you pick a C student, necessarily, but C would have been able to convince most of our class when it came to certain things. He wouldn't have been a bad choice to convince most of us on a change. 5. Managers. Look to this group last because they are usually the ones telling people what to do. But often it is because they got where they are being competent, nice guys. This does not apply if the boss's son is manager. Or if you know people just pay them lip service. Be careful to investigate thoroghly if your choice comes from this category. Even the best manager is no substitute for a good choice from the above categories. Once you have your shortlist down, its time to GOSSSIP. No, not really. Just test the waters. Make a generic comment about one of them to a rando by the water cooler and see the reaction. When you find your perfect change agent, your job is to get them to go out with you. Almost literally. If they're the same sex as you, as them for lunch or coffee (your treat) to discuss an important issue. Ask for an important meeting if they are male. Be blunt. Present it by saying you need their expertise in an important matter. (Oh, BTW do not pick the class gossip because you need to change agent to work covertly) Pose questions like, "How would you implement something like this?" "What do you think this department would do if this change happened?" Let them know why you chose them; ask them what they think of the changes. These people are often "in the know" and no matter what category they fall into, will be flattered you asked for their expertise. Then you ask for their help. Whether its being a cheerleader in the lunchroom or doing actual implementation with you, that is more dependent on the change and the appropriateness to your workplace. Let them know they can put the implementation on their resume (if they are young) or simply how much you value them. Ask if there is anything you can do to make their help more available, perhaps like taking some aspect of their job less appealing off their plate. The returning mom to the work force is the student who went to Spain for the year and came back. They can seem pretentious when they return. Or too eager to jump back in. The implication is that they've been away because they're either more cultured or smarter than you. So you need to sincerely respect whoever you choose. You really do need their help so you want to take their feedback seriously and give them the respect they deserve!
New Baby
Hi strangers! Posting this picture as an "I'm sorry" gesture for not keeping up with Relaunch. The last month has been a whirlwind. Currently trying to do a post but if things go as usual, she will interrupt it and I'll have to cut out. Thanks for your patience!
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