Last month we talked about steps you can take in cutting costs across the board, while still maintaining quality. What about when you want to innovate, though? Is there a way to control costs, while putting the changes in place that will change the nature of your business? Is that even possible?

Innovations Come in Many Forms

When it comes to innovating, you can take many approaches. You can overhaul your design, you can optimize your operations, or you can employ lean manufacturing concepts (among many others). With all this change, how is it possible to keep costs down? Won’t there be some additional costs involved in innovation?

The Costs Vary

Each of these innovations comes with its own attached costs. Some of them are quite apparent. For instance, overhauling design has costs in time, research, and prototyping. Some of them may have hidden costs. If you optimize your operations, you might need to let some people go or hire more people.

Assessing Costs

Since each different type of innovation has its own set of costs, how can you assess the costs before proceeding? You can do this, by creating an cost assessment sheet. Below are some questions you can include in that sheet.

  • Will there be any downtime during the innovation process?
  • If so, how long do you expect the downtime to last?
  • Will you need to employ more people or hire out a consultant during the process?
  • Will you need to make graphic representations for the innovation (such as product designs, or a new workflow chart)?
  • If so, will they be created in-house, or will they be contracted out?
  • Will you need to create physical representations for the innovation?
  • Will this innovation result in needing to let some staff go, or needing to hire more staff?
  • Beyond downtime, how much time will be needed to complete the innovation?
  • Will you need to pay a sum of money up-front or in installments to complete the innovation?

By using this sheet and including other questions which might be relevant to your business, you can start to assess the costs of the innovation. It is by no means a full-proof method of assessing costs, but it will give you a good view of the costs involved in your innovation. This will help you control those costs.