Having pets

I love animals, I really do. It breaks my heart when I see people hurting animals or harming their natural habitats. Regarding pets, I think people should only have a pet if they really are committed to taking care of them

My husband has been asking me lately to have a dog and these requests are becoming more and more insistent…he is the CFO of our company, however, sometimes, I have to do his job, I thought it would be a good idea to perform a customer profitability analysis in order to assess if this new “customer” could add value to our business.

I will take into account possible revenues of the hours of amusement that it could provide, the good influence that a pet has on children, the company of pets...Nevertheless, these revenues are discounted in the time that I have to spend at school, my husband works and that the kids spend in kindergarten.

We have to take in account not only the obvious costs like food, the breeder costs (if we decide to buy), spaying or neutering, the pet furniture, vaccination, vet visits, pet insurance (you can see real numbers here) but also the activity based costs that have to be assigned to the customer, like overhead costs ( the rent of the house or the cleaning lady's salary).

This customer profitability evaluation also had in mind other factors like the long-run customer profitability (we can have more children) and the ability to learn from this customer.

Therefore,  I took all these factors into consideration and concluded that the revenues still compensated the costs.

However, as a company our mission is to create value to the customer, and I don’t think we could create much value to this particular customer without exceeding capacity constraints, so this time I will have to say no. 

Family enterprise

Hello again dear readers

Looking abstractly at the subject, a family is a very good metaphor for a company. Like in companies, the big issue is to make it grow and keep it healthy.

Well, as a CEO of my company, growth of the business was widely discussed with the CFO (my husband). I thought it could be interesting to summarize this discussion using the Five Step Decision Making Process.

Step 1- Obtaining Information

This was difficult, we had to do intensive research
in order to prepare such an investment. We based our research essentially on the observation of other companies that had already taken the decision and consulted source like the internet and specialized books.

Step 2- Make predictions about Future Costs

Well, in this matter we evaluated not only the financial costs (the most obvious), but also all other costs, like time costs, availability costs, space costs…Most of these relevant, except for the space since we already had a big house.

Other important costs that we had to assess were the opportunity costs. These include all the the things our company had to forego in order to focus on this project and make it viable; the good night's sleep, the mornings in bed, the late night parties...

Step 3 – Chose an alternative

We studied some alternatives like outsourcing (adopt) or being a host family at weekends. Although they seem good options, they weren't the best solution for our business at the moment.

Step 4 – Implement the decision

In order to implement this project we just adapted the facilities (the bedroom and the bathroom), I stopped smoking and we got used to doing overtime

Step 5 – Evaluate performance

We are still in the first phase and decided to use the following KPSs based on our strategy to evaluate performance:

-Number of hours slept

-Quantity of milk drank

-Number of minutes/hours crying

-Number of dirty diapers

These will change according to the needs…

I’ll keep in touch…