Definition
Cost-benefit analysis is the systematic approach to evaluating the costs and benefits of a decision. Founders reach for it when a vague conversation needs a shared, specific meaning. Name it clearly, then let the next decision — a hire, a price, a test, or a pass — follow from that meaning.
In the room
How the word shows up in a real conversation.
A mentor asks, “What is your Cost-benefit analysis?” The useful answer is concrete: systematic approach to evaluating the costs and benefits of a decision. A slide title is not an answer.
Common mistake
Using Cost-benefit analysis as a label instead of a fact. If you cannot point to the evidence — a number, a customer, or a written assumption — you are using the word as jargon.
See also
Cost of goods sold (COGS)
Direct costs associated with producing goods sold by a company.
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Cost-plus pricing
Pricing strategy that adds a markup to the cost of producing a product.
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Cost-volume-profit (CVP) analysis
Financial analysis examining how costs, volume, and profits are related.
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Corporate social responsibility (CSR)
Business practice of operating in ways that benefit society and the environment.
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