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Purpose and benefits

Having spent time and effort coming up with the idea for a new project or initiative, the next step is to establish whether or not it is viable. A cost/benefit analysis is a useful way of determining this. The costs and benefits are compared, and the project is generally found to be viable if the benefits outweigh the costs. To enable this comparison, every aspect of the project is given a financial value.

While it sounds extremely quantitative and may factor out “good” ideas that do not have an immediately apparent financial return, cost/benefit analyses can also take into account qualitative value (although this is much more difficult to determine because it is often based on intuition). This form of analysis is extremely useful in enabling you to frame an argument in terms of its costs and benefits—which is generally the basis for getting approval for any project or initiative.