When the potential value is identified, the seller needs to determine how much the final solution is going to cost the buyer. Now, to calculate the exact investment that the buyer will need to make, the seller needs to do several things.
Calculating the Investment
- First, identify and communicate the specifics of the solution.
- Next, link the provided capabilities (in other words, the products and services) back to the business issues that they want to resolve.
- Third, calculate and communicate the capital cost. In other words, the fixed, one-time cost.
- Next, calculate and communicate the operating cost or the ongoing, recurring cost over time.
- Then, adjust the mix of one-time and ongoing cost to match the buyer accounting preferences.
Sellers should make sure they know how buyers prefer to pay for their investments. For example, would the buy prefer to pay for equipment outright or rent it over time?