Opportunity Cost


Businesses are constantly faced with choices. If I do X, I will not be able to do Y. This is because most businesses do not have unlimited resources. They are limited by both time and money. The choices that they make are known as “opportunity costs.”

So, when thinking about options, it is important to think strategically and ask the following questions:

1. Will this increase revenue or cut nonessential spending?

2. Is this decision related to the core of why I am in business?

3. Will this decision use resources that could be utilized better elsewhere?

Asking these questions will assist any business in making the best possible decision, no matter what the situation.