WHAT IS VALUE?

The other night we went out to dinner at a moderately priced Italian restaurant. As I scoured the wine menu, I began to think of the value of certain items. Generally in a restaurant, the wine is marked up three times. For example, a $45 bottle at the restaurant would cost you about $15 at your favorite liquor store. Some restaurants use a larger mark, but most of the eateries in San Antonio seem to use that formula. That, in and of itself, isn’t a real good value, but they do open the bottle for you and that is labor.

There are approximately 25 ounces in a bottle of wine. Depending on the glass size, there are four or five servings. We chose a nice Pinot Noir at $55 per bottle. It worked very nicely with the pasta. We could also buy that wine for $13 per glass. Depending on the serving size of the individual glass, we either made a prudent decision, as we usually have two glasses apiece, or we made the sucker play.

In this case, the difference was small either way. Given other purchases, however the difference may be more significant. In your business dealings, you are always determining value. Evaluation is how we make decisions. The quality of our evaluation determines the effectiveness of our decisions. When determining value, we need to look past the obvious. We need to peel back the layers of the onion. We need to be thorough in our evaluation so we will always receive the best possible value.

Steve Cook is the managing member of Cook, Gola and Company, PLLC, Certified Public Accountants with offices in San Antonio and Austin. www.cookgola.com