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Archiver > APG > 2001-04 > 0986817458


From: "Richard A. Pence" <>
Subject: Re: [APG] client expenses
Date: Mon, 9 Apr 2001 07:57:38 -0400
References: <35.13515945.2802e289@aol.com>


Natalie Cotrill wrote:

> below I've listed a relatively easy way to figure out
*your* paper
> costs per sheet, based on your equipment and the supplies
> that you use.

> The next time you install a new toner cartridge, try this:

> 1) Start a new toner cartridge with a new ream of paper

<the steps are snipped>

> 8) The result of this division will give you *your* cost
to print
> out each sheet.

> Once you have determined *your* cost to print a sheet of
> paper, then you can decide what to charge based on that
> number.

An interesting exercise, including the math, but the cost of
toner and paper, I am afraid, are two of the less expensive
elements in the true cost of making a copy on your home
computer!

In fact, copies made at home on the computer are so
expensive that if you had to actually pay for them on a
sheet by sheet basis you would probably refuse to do so! <g>

I haven't given much thought to the cost accounting involved
in owning and operating a genealogical research business,
presumably in your home, but boy would I study up on it
before i started giving away copies at .03!!!

I also read the rest of your message with interest and, in
particular, noted the inventory of cost items. What I failed
to see was any accounting for the really important cost
items: rent, depreciation, education, to name some. You
didn't mention these, let alone such real costs as "the
opportunity cost of capital" (whether you realize it or not,
this can be a bigger ticket than paper!) or other "costs,"
such as how much you could be making had you stayed at your
"other job." <g>

While I was growing up, my Dad ran a variety of small
businesses, often providing services at ridiculously low
rates or selling goods with the barest mark-up. We seemed to
live comfortably enough, but it wasn't until years later
that I realized why he never really got ahead of the game.
(Economis 401, "Theory of the Firm" will help in this
regard! <g>)

In short, Dad operated so he could cover his out-of-pocket
costs and have enough left over to buy food and clothing and
pay the rent. He usually owned the building where the
business was located, so that wasn't a "cost" (in his mind).
Nor were equipment and fixtures a "cost" because he didn't
make provision for their replacement or repair! Nor did he
consider the value of his own labor a "cost" (or that of my
mother or we three kids - after all, we all worked for
nothing!). Once he had to start borrowing money to cover
these forgotten expenses, the business no longer was
"profitable" - meaning, of course, that it never had been,
even though we never went hungry.

I'm sure you haven't fallen into the trap of overlooked cost
items, but I didn't see any signs of encouragement in what
you wrote.

Regards,
Richard


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