Public Home | Gold Home | Login

Links . . .
 

About . . .
 
Overview
  Member Benefits
  FAQ
  Founder, M. Angier
 
Affiliate Program
  Become a Member
 
Contact Info
  Mission Statement
  Guarantee
  Update Info (subs)
  Site Map
  Tell a Friend
  Your Privacy

 

Resources . . .
 
Articles
  Courses
  Customer Service
  Gold Member Home
  For Publishers
  Forums
  Free Stuff
  Helpful Links
  Premier Partners
  Product Catalog
  Quotes Library
 
Reports
  Sample Articles
  Sizzle Sites
  SuccessMark Cards
  Success Shop
  Top Ten Lists
  Tools
  World Class Biz
 

 

 

 

By Michael Angier

 

   

 

Google
Web SuccessNet

Are You Leaving Too Much on the Table?

I’m surprised how many business owners and managers don’t know the real meaning of the term “Opportuníty Cost.” And many of those who DO know what it means rarely factor it into their decision-making process.

No one likes to lose money. And we all want to be as efficient and effective as we can with our resources—especially time.

But what we often don’t see is the income and value we leave on the table when we take one action over another.

Let’s say a business has extra land that could be sold or leased. If the land is leased, the opportunity cost is some other thing that could be done with it. Instead of leasing the land, one could sell it and invest the capital into a new product line. In this case, the Opportunity Cost (OC) is the forgone opportunity to create the new product line.

All too often, we take on projects and commit resources without considering the actual and eventual costs involved. We have to look at the big picture, make good decisions and not just react to things that come our way.

The word “decide” is from the Old French word decidere. It literally means to cut off. When we choose, we're not only choosing FOR something, we're also choosing NOT to do something else.

We live in a world of amazing opportunity. We can do anything we want, but we can’t do EVERYTHING we want. We must choose carefully because whatever we pursue takes over some of our resources. And these resources may not be available for other opportunities.

The ninth pillar of a World Class Business is stewardship. And it's incumbent upon us to be good stewards of all our resources. Assessing the OC will help us do that.

Action Point
When considering a new venture, client or project, be sure to invest the time to look at what your decision will exclude. What is the opportunity cost—the OTHER ventures, clients or projects you're cutting off when you decide.

It’s not always easy to determine, but if we don’t even look at it, we will always leave money on the table.

“In all affairs it's a healthy thing now and then to hang a question
mark on the things you have long taken for granted.”

                                          —Bertrand Russell, author and mathematician

 

© Copyright Success Networks International.
SuccessNet is a worldwide association committed to helping people become more knowledgeable, productive and effective. Their mission is to inform, inspire and empower people to be their best—personally and professionally. Free subscriptions, books and SuccessMark™ Cards available at
www.SuccessNet.org
Send This Page to a Friend

PO Box 2048 Win-Win Way
South Burlington, Vermont 05407-2048 USA
BeYourBest@SuccessNet.org

Last Updated 04/05/2006