Opportunity Cost

This is a term used in business it basically means that what else can you do instead of something else. For example instead of spending all your time doing filing you could be going out to get new business. The scenario above could be remedied by employing a secretary. The trick is to weigh up the opportunities and see if the benefits outweigh the costs if the costs are greater the simple answer is don't do it!

I first came across the term when exploring time management, it seems like a straightforward thing yet many businesses ignore it and so are not as productive as they could be. I think that if every business operated as efficiently as they could not only would they potentially achieve more  but I think that it would ultimately benefit the economy overall as there would be less money and resources wasted, and the economy would be operating efficiently too.

If it is really simple why don't people do it?

There are a number of theories as to why people often don't do it; firstly is that they don't know how. Secondly is that they are too busy doing "stuff" that they feel is important but may be. Another theory is that they feel that their business is already running as efficiently as it could be. Often it can take an external source to identify areas that could be improved; this ultimately costs both time and money as the fees business consultants charge can be rather steep.

With my business I often do assessments of myself and of the business and if I spot any weaknesses then I address them which some could argue means that I am spending less time looking for new clients or doing stuff for current clients. My response is that whilst yes at that particular point in time I'm am not doing something for my clients it means that I am able to improve the service I offer them in the future. Another way of assessing is gaining feedback from my clients.