Opportunity Cost

  • Opportunity cost does not show up in your financial statements, but it is something that all businesses should monitor
  • “I can’t afford to hire anyone” – most likely, the reality is you cannot afford NOT to hire someone
  • How much profit does a customer generate? How many hours did it take to get a customer? The resulting quotient is what you are worth to the business. If you are performing other activities that pay less, you should consider hiring other employees/contractors to do those tasks allowing you to generate more profits
  • The cost of you not performing at the highest level is an example of opportunity cost
  • Another example would be procrastination – each day you don’t have a new customer is a day you do not enjoy the profits from that customer

If you would like to improve your business or know anyone who would like to improve theirs, call me.

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No Cost, No Commitment