Cost-of-Movement Calculation
Framework for calculating true total cost of geographic migration, including hidden costs typically ignored.
Framework for calculating true total cost of geographic migration, including hidden costs typically ignored. Reveals why migrations often cost 2× projections - 46% of costs are hidden.
When to Use Cost-of-Movement Calculation
Use when budgeting for geographic expansion. Apply before committing resources to ensure full cost visibility beyond obvious direct costs.
How to Apply
Calculate Direct Costs
Sum obvious, measurable costs: Hiring (employees × salary), Marketing (customers × CAC), Infrastructure (servers, offices, compliance systems).
Questions to Ask
- How many local employees needed?
- What is customer acquisition cost?
- What infrastructure is required?
Outputs
- Direct cost total
Calculate Indirect Costs
Sum hidden costs: Management attention (opportunity cost of CEO time), Execution risk (probability of failure × direct costs), Brand dilution risk.
Questions to Ask
- What % of management time diverted?
- What is probability of failure?
- What is brand damage if public failure?
Outputs
- Indirect cost total
Calculate Adaptation Costs
Sum required changes: Product changes (localization, payment methods, compliance features), Regulatory compliance (legal entities, tax systems, licenses), Cultural adjustments (training, process changes).
Outputs
- Adaptation cost total
Calculate Philopatry Costs
Sum origin-bias waste: HQ overhead (decisions made in origin, local team waits), Travel costs (exec trips), Duplicated work ('not invented here' rebuilds).
Outputs
- Philopatry cost total
Sum Total Migration Cost
Total = Direct + Indirect + Adaptation + Philopatry. Compare to projected revenue. If revenue/cost ratio <1.5×, migration marginal. If <1×, don't migrate.
Outputs
- Total migration cost
- Cost breakdown by category
- ROI assessment