Tweet

Total Cost of Ownership (TCO)

Written by: Nilesh Shah

Article Overview: Total Cost of Ownership or TCO is referred to as a concept by which all costs associated with a capital purchase over a given time period are accounted for in the value assessment.

Total Cost of Ownership (TCO)

A TCO assessment ideally offers a final statement reflecting not only the cost of purchase but all aspects in the further use and maintenance of the equipment, device, or system considered.

For example, the decision to buy a television or home-theatre system may result in the following TCO analysis: the higher initial price of a high-end equipment is to be balanced by adding likely repair costs and earlier replacement to the purchase cost of the cheaper bargain brand, among other factors.

Once pass-through a cost of ownership analysis, it is quite important to understand an entrepreneur’s financial goals to arrive at a useful solution. Once opportunities for improvements are identified, the TCO process is then used to identify the alternative with the lowest total cost, based on one’s needs.

Related Articles
  Conspiracy or coincidence?
  About those Microsoft ads, some folks SHOULD buy a PC
  Lease Rental versus Outright Purchase - A Worked Example
  Total Cost of Ownership TCO of IT
  Choose a Structure

Article Tags: bargain brand, cost of ownership, entrepreneur, financial goals, home theatre system, improvements, initial price, tco analysis, television



Related Forum Posts
No fee biz banking - I miss Bizsmart - it was a great no fee banking option for businesses but I guess the company wasn't making much returns and had to shut down. Are there any other no fee or Low Cost Business banking options still available in Canada?
Research & Dev Tax Credit - at No Cost (Canada) - Brian, I have a colleague that can provide you guidance and even assist in maximizing a R&D Tax Credit from the Government of Canada (If you are Canadian). All this at No Cost to You. I know her well and have referred other people to her. She's got plenty of experience in the field. If you're interested (anyone else on this forum too) just send me a PM and I will share her details with you.
Re: When did your entrepreneurism start? - I sold my science fair project when I was 9 year old after I won 2nd place. Created crystals from lumps of salt that collected on a string. Cost less than a penny to make and got $1 a piece for them. Not bad profit margin but was too young to realize I was ripping anyone off at the time.
Picking a corporate lawyer - Hi Everyone, I was just curious to know what's the most important criteria a small business owner should look at when choosing a corporate lawyer? -Cost/hr? -Location? -Reputation/Referral? -Experience? -Personality? How did you pick your lawyer? And what's a fair price to pay per hour? Thanks
Re: [JOINT VENTURE] Want FREE Staff? Want to Scale Up Massively? - Hi Alan, Welcome to the forum! [quote="Joint Venture":2bfdqwzb]Total transparency is a must when JVing with someone.[/quote:2bfdqwzb] What about when inviting people to send you their proposals...? Cheers, David H


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Are You Fulfilled

Top Ten Home-Based Businesses

Steps For Starting A Small Business

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.