![Screenshot_20241102-101121_1.jpg](https://cdn.steemitimages.com/DQmSafYiJR9qaWcSKMsAVjokgfHhBgfjZfuhPghDEFpzqkX/Screenshot_20241102-101121_1.jpg) ^{designed in canva.} ### ^{Introduction.}^{![C3TZR1g81UNaPs7vzNXHueW5ZM76DSHWEY7onmfLxcK2iPeEoNVGbpcZGEKQq8VaT6hYkYtKYLeoEctx3fgdGJH1H3Ztab45BFSQeHGm4Jbm6u157mp4XyQ.png](https://cdn.steemitimages.com/DQmZsCs3hxbFYfB1naY8BRycxss8bpjyDARDk4U3xuf5Dry/C3TZR1g81UNaPs7vzNXHueW5ZM76DSHWEY7onmfLxcK2iPeEoNVGbpcZGEKQq8VaT6hYkYtKYLeoEctx3fgdGJH1H3Ztab45BFSQeHGm4Jbm6u157mp4XyQ.png)

Hi steemian's happy to write here once again this is a new week, and a fantastic course outline has been lined up and it has to do with cost, in our daily activities we make expenses this amount to cost, commodities are been bought and exchanged goods and services with the sole motive of making extra Money.

To maximize cost, there should be checks and balances in a long run, when this had been achieved cost's will be balanced perhaps be in equilibrium, when cost is reduced there will be less expenses this cut across all fares of business field's, let's talk about **cost** in detail below.

### ^{What is Cost And How Important It Is For Entrepreneur.}^{![C3TZR1g81UNaPs7vzNXHueW5ZM76DSHWEY7onmfLxcK2iPeEoNVGbpcZGEKQq8VaT6hYkYtKYLeoEctx3fgdGJH1H3Ztab45BFSQeHGm4Jbm6u157mp4XyQ.png](https://cdn.steemitimages.com/DQmZsCs3hxbFYfB1naY8BRycxss8bpjyDARDk4U3xuf5Dry/C3TZR1g81UNaPs7vzNXHueW5ZM76DSHWEY7onmfLxcK2iPeEoNVGbpcZGEKQq8VaT6hYkYtKYLeoEctx3fgdGJH1H3Ztab45BFSQeHGm4Jbm6u157mp4XyQ.png)

Cost can be defined as a financial expenses sustained from the sales of good's and service's, In cost good's and service's identified are measured and compared therefore prompting Entrepreneur to making good and inform decision in order to maximize profit and reduce lost.

Cost is very important as it can be applied to various phases of entrepreneurship in order to booster the economic valuables in the society, even in governance there is cost which helps in the day to day running of the economy overall. Cost can be applied in some certain areas as an entrepreneur which includes.

* i. **Product Development**: Analyzing cost help's entrepreneur to know the profitability capacity involved in the development of new product, for Instance the development of paracetamol, with cost Analysis an entrepreneur will know and estimate the cost in producing this product by so doing other parameters like distribution, marketing, will be properly evaluated. You can see analysis is very key.

* ii. **Market Entry**: Cost Analysis will Aid an entrepreneur to properly research courtesy the overall attractiveness of various market section thereby selecting the best market strategy, this will booster the strength to making a head-way in the market in such a way that the entrepreneur will then know the regulations and how compliance can be sustainable.

* iii. **Resource Allocation**: With cost Analysis entrepreneur can manage on how to utilize the resources knowing that it is not advisable to put ones egg's in one basket, cost is so important because it can help entrepreneur to locate their resources as a result of a trending business strategy when this is been achieved Money, time, goal', project's can be achieved optimally, and there will be no wastage or wasteful Cost.

### ^{Establish The Difference Between Cost And Expenses.}^{![C3TZR1g81UNaPs7vzNXHueW5ZM76DSHWEY7onmfLxcK2iPeEoNVGbpcZGEKQq8VaT6hYkYtKYLeoEctx3fgdGJH1H3Ztab45BFSQeHGm4Jbm6u157mp4XyQ.png](https://cdn.steemitimages.com/DQmZsCs3hxbFYfB1naY8BRycxss8bpjyDARDk4U3xuf5Dry/C3TZR1g81UNaPs7vzNXHueW5ZM76DSHWEY7onmfLxcK2iPeEoNVGbpcZGEKQq8VaT6hYkYtKYLeoEctx3fgdGJH1H3Ztab45BFSQeHGm4Jbm6u157mp4XyQ.png)

Considering Cost and expenses you find out that there are so many differences, people misuse this two for various ocassion and reason's, here I will distinguish then.

Cost|Expenses.
-------------|-------------
|
Cost is the Amount you spent to get something.|Expenses involves the cost obtained Along the process.
|
Cost places Monetary gains placed in a resources.|Expenses places value on resources used up/Consumed.
|
It involves cash invested or purchase of other commodity.|Reflects on the Entrepreneur's Net income, looking at income statement.
|
Asset's or expensed can be capitalized.|It Includes financial outlaws that cannot be capitalized.

Just as I have highlighted cost involved money spent to acquire something, it can be Money spent to get food items, build a house, buy a landed properties etc. it depends on the individual involved in this phase I will show a food I bought how much i spent and the expenditure that I made overall.

![iMarkup_20241102_131647.jpg](https://cdn.steemitimages.com/DQmXj3qYFTLDT4Ekh4kWpe9MFJthgUDfehtA7vJSPaAgdYT/iMarkup_20241102_131647.jpg)

![iMarkup_20241102_131607.jpg](https://cdn.steemitimages.com/DQmP4y4w3X9fCxsBaqEDskMHYYQYac127yw1WhbP4Dx8gEk/iMarkup_20241102_131607.jpg)

This is a real example of a food I bought this afternoon here in my street **Nigeria**, this is a cooked portage beans, with Raw Garri, sachet water, and sugar.

Item's are bought food are consumed by human, as a living thing we need food for our overall well-being and to boost our health and cycological comfort, I quickly got the above listed food thereby making some good expenses and they are bisected as follows.

Item's|Cost
-------------|----------
|
Beans|700 Naira.
|
Raw Garri|3 cups= 1,200 Naira.
|
Sachet water|4 piece's= 100 Naira.
|
Sugar|6 piece's=100 Naira.

Now I have spent money buying something, I have listed the various Expenses incured, I have spent money, my net-income has reduced along the process.

My resources has been used, cost and expenses in most ocassion people use these Word's interchangeable but ThankGod I was able to differentiate then.

### ^{What are the benefits of performing a good cost Determination.}^{![C3TZR1g81UNaPs7vzNXHueW5ZM76DSHWEY7onmfLxcK2iPeEoNVGbpcZGEKQq8VaT6hYkYtKYLeoEctx3fgdGJH1H3Ztab45BFSQeHGm4Jbm6u157mp4XyQ.png](https://cdn.steemitimages.com/DQmZsCs3hxbFYfB1naY8BRycxss8bpjyDARDk4U3xuf5Dry/C3TZR1g81UNaPs7vzNXHueW5ZM76DSHWEY7onmfLxcK2iPeEoNVGbpcZGEKQq8VaT6hYkYtKYLeoEctx3fgdGJH1H3Ztab45BFSQeHGm4Jbm6u157mp4XyQ.png)

There are numerous benefits when a good cost Determination is been evaluated, and below are some various pivotal benefits and they includes.

### 1.^{Internal Benefits.}^{![C3TZR1g81UNaPs7vzNXHueW5ZM76DSHWEY7onmfLxcK2iPeEoNVGbpcZGEKQq8VaT6hYkYtKYLeoEctx3fgdGJH1H3Ztab45BFSQeHGm4Jbm6u157mp4XyQ.png](https://cdn.steemitimages.com/DQmZsCs3hxbFYfB1naY8BRycxss8bpjyDARDk4U3xuf5Dry/C3TZR1g81UNaPs7vzNXHueW5ZM76DSHWEY7onmfLxcK2iPeEoNVGbpcZGEKQq8VaT6hYkYtKYLeoEctx3fgdGJH1H3Ztab45BFSQeHGm4Jbm6u157mp4XyQ.png)

* **Accurate negotiation of commodity**: when you negotiate price difference it set you on a good path-way as a result of the actual cost of the commodity.

![iMarkup_20241102_133653.jpg](https://cdn.steemitimages.com/DQmafJ2aFuxwzDFJ3QUFNFnYLmVxBtVa71DCn6ctfJqTK7Z/iMarkup_20241102_133653.jpg)

_{commodity bought with accurate negotiation.

* This commodity i bought initially the price I was told was very high but after series of negotiations I got it on a low price.

* ii. **Profit maximization**: Nobody want to incure unnecessary cost, therefore there should be efficiency in cost management in order to maintain good profit margin.

* iii. **Making Inform Decision**: Making Inform decision helps in resources utilization, and proper management of resources generally.

* iV. **Budgeting**: budgeting is very important, when you budget you know the actual amount you want to spend, you perhaps know you spending power, just as they say failure to plan, you have already planned to fail. When you budget you have a spending structural financial planning.

* V. **Extravagant spendings**: when cost is been controlled reduction is eminent, the velocity of your spending will be limited.

### _{External benefits.}

![C3TZR1g81UNaPs7vzNXHueW5ZM76DSHWEY7onmfLxcK2iPeEoNVGbpcZGEKQq8VaT6hYkYtKYLeoEctx3fgdGJH1H3Ztab45BFSQeHGm4Jbm6u157mp4XyQ.png](https://cdn.steemitimages.com/DQmZsCs3hxbFYfB1naY8BRycxss8bpjyDARDk4U3xuf5Dry/C3TZR1g81UNaPs7vzNXHueW5ZM76DSHWEY7onmfLxcK2iPeEoNVGbpcZGEKQq8VaT6hYkYtKYLeoEctx3fgdGJH1H3Ztab45BFSQeHGm4Jbm6u157mp4XyQ.png)

* **Competitive Merits**:. This upgrades market exposition through a systematic true cost management modules.

* **Individual confidence**: As an investor it will be wise of you to demonstrate financially responsibility.

* **Customer's Satisfaction**: Just as they said customer's are always right, there should be values and Worth placed on price.

* **Standards and regulations**: There should be a good data of accountability, for complete adherence and tax reforms.

* **Galvanized decision making**: There should be good and comfortable and confidence guide to making good and quality decisions.

#### Financial Benefits.

![C3TZR1g81UNaPs7vzNXHueW5ZM76DSHWEY7onmfLxcK2iPeEoNVGbpcZGEKQq8VaT6hYkYtKYLeoEctx3fgdGJH1H3Ztab45BFSQeHGm4Jbm6u157mp4XyQ.png](https://cdn.steemitimages.com/DQmZsCs3hxbFYfB1naY8BRycxss8bpjyDARDk4U3xuf5Dry/C3TZR1g81UNaPs7vzNXHueW5ZM76DSHWEY7onmfLxcK2iPeEoNVGbpcZGEKQq8VaT6hYkYtKYLeoEctx3fgdGJH1H3Ztab45BFSQeHGm4Jbm6u157mp4XyQ.png)

* **Large profit Margin**: Accelerate cost that will booster higher profit margin.

* **Higher Liquidity**: With good and efficient Cash flow liquidity will move from one level to another, thereby improving the efficacy of Cash flow.

* **Reduction in Debts**: debt kill's income inflow's, therefore borrowing should be reduced overall.

* **Value Increase**: increased transparency lead's to increase in value, remember value is a Worth placed on something.

* **Good Return on Investment**: yields should be in a maximum phase to booster investment optimization.

### ^{How do you Determine The Cost of Your Business^{![C3TZR1g81UNaPs7vzNXHueW5ZM76DSHWEY7onmfLxcK2iPeEoNVGbpcZGEKQq8VaT6hYkYtKYLeoEctx3fgdGJH1H3Ztab45BFSQeHGm4Jbm6u157mp4XyQ.png](https://cdn.steemitimages.com/DQmZsCs3hxbFYfB1naY8BRycxss8bpjyDARDk4U3xuf5Dry/C3TZR1g81UNaPs7vzNXHueW5ZM76DSHWEY7onmfLxcK2iPeEoNVGbpcZGEKQq8VaT6hYkYtKYLeoEctx3fgdGJH1H3Ztab45BFSQeHGm4Jbm6u157mp4XyQ.png)

Determining cost in your various business is very simple if you follow some important information's and procedure's, I highlighted some steps below 👇.

### Identify Cost.

![C3TZR1g81UNaPs7vzNXHueW5ZM76DSHWEY7onmfLxcK2iPeEoNVGbpcZGEKQq8VaT6hYkYtKYLeoEctx3fgdGJH1H3Ztab45BFSQeHGm4Jbm6u157mp4XyQ.png](https://cdn.steemitimages.com/DQmZsCs3hxbFYfB1naY8BRycxss8bpjyDARDk4U3xuf5Dry/C3TZR1g81UNaPs7vzNXHueW5ZM76DSHWEY7onmfLxcK2iPeEoNVGbpcZGEKQq8VaT6hYkYtKYLeoEctx3fgdGJH1H3Ztab45BFSQeHGm4Jbm6u157mp4XyQ.png)

* Fixed cost of productivity, this is also regarded as sale's, this can be categorized as rent, insurance, salaries etc. this costs remains at equilibrium. Rent, salaries are constant unless when reviewed.

* Variable Cost, this varies from one point to happen depending on the production of sale's, of raw materials, utilities and other variable Cost.

* Partially fixed Cost, this involves galvanized employees's benefit like travel expenses etc.

### Gathering of various Data.

![C3TZR1g81UNaPs7vzNXHueW5ZM76DSHWEY7onmfLxcK2iPeEoNVGbpcZGEKQq8VaT6hYkYtKYLeoEctx3fgdGJH1H3Ztab45BFSQeHGm4Jbm6u157mp4XyQ.png](https://cdn.steemitimages.com/DQmZsCs3hxbFYfB1naY8BRycxss8bpjyDARDk4U3xuf5Dry/C3TZR1g81UNaPs7vzNXHueW5ZM76DSHWEY7onmfLxcK2iPeEoNVGbpcZGEKQq8VaT6hYkYtKYLeoEctx3fgdGJH1H3Ztab45BFSQeHGm4Jbm6u157mp4XyQ.png)

* There should be a great balance sheet, this Step is very pivotal to determine the cost of your business.

* Preparation and issuance of receipts, and invoice.

* Records should be done in rolls, courtesy industrial benchmark hopefully if available. By doing all this one can determine business Cost.

### Review And Refine.

![C3TZR1g81UNaPs7vzNXHueW5ZM76DSHWEY7onmfLxcK2iPeEoNVGbpcZGEKQq8VaT6hYkYtKYLeoEctx3fgdGJH1H3Ztab45BFSQeHGm4Jbm6u157mp4XyQ.png](https://cdn.steemitimages.com/DQmZsCs3hxbFYfB1naY8BRycxss8bpjyDARDk4U3xuf5Dry/C3TZR1g81UNaPs7vzNXHueW5ZM76DSHWEY7onmfLxcK2iPeEoNVGbpcZGEKQq8VaT6hYkYtKYLeoEctx3fgdGJH1H3Ztab45BFSQeHGm4Jbm6u157mp4XyQ.png)

* Financial statement's should be frequently reviewed.

* Seek good and quality financial advice, or you employ a financial adviser.

### Conclusion

* As the course went on I highlighted that cost is an expenses obtained from the sales of good's and service's rendered, when good decisions are been made lost is reduced.

* I still went further to highlighting the difference between cost and expenses, note all image's used are my own no sourced image, Thank you sir for this wonderful course outline as I await your review.

* I invite @Khan55, @ahlawat, @vishwara. Please join this beautiful contest.}}}}}}}}