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Businesses tend to pay more for things that regular people pay a “normal” price for. For example, business internet connections are often a lot more expensive than residential ones, and they’re usually expected to pay a lot of money for things such as hardware. But then the reverse is also the same. Sometimes businesses get massive discounts for certain things like buying bulk produce.
So, if businesses do have the power to buy things for a lot less, how do they justify those expensive one-time purchases, or those long-running yet expensive costs that sometimes creep up? Whether you’re starting a business for the first time or are looking to optimise your finances, here’s some information on how businesses can justify spending so much.
Convenience and time are worth a lot in business
Businesses aren’t afraid to pay a lot more for something it offers convenience. For example, they’re fine paying more money for something like fast delivery if the item that’s coming is extremely important to their needs. Similarly, they’re no stranger to paying more for things like warranty and repair services if it means that a trained hardware technician arrives at their business to fix things when it’s broken.
In other words, businesses are perfectly fine paying a lot of money for something because they understand the value of convenience.
Having something utterly unique is worth the additional cost
Perhaps you’ve read a little about how much large companies pay for their logos. For example, the iconic Symantec tick logo was worth over a billion US dollars, whereas the original Twitter bird only cost $15. How does a company justify spending so much on a logo? Because it’s utterly unique, because it goes on everything they create, and it helps to establish their brand’s presence. When it comes to the value it offers, it’s hard to calculate because of just how important a logo is.
But on a slightly smaller scale, we can consider things like creating a unique piece of software for your staff to use or contracting an office building that is unlike every other. Companies like Canal Architectural specialise in creating unique and bespoke items, and it’s usually worth the additional cost because you’re not just getting a quality end product, but you’re also getting long-term support for it.
Businesses expect a return on everything they pay for
Whenever there’s a big expense credited to a business, management is probably already thinking of ways to recuperate those costs. However, a truly seasoned business owner or entrepreneur will already have ideas on how a large expense can be turned into a profitable endeavour for the whole company.
For example, visiting a trade show can be a big expense that might not yield much return. However, if you’re an experienced business owner, then you’ll know that it’s worth investing a lot into your trade show appearance so that you can round up more customers and attract different audiences. This means that the amount of money a company pays for events like this is ultimately worth the handful of acquisitions and deals made.
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