Opportunity Cost, Where are You Investing Your Resources?

Have you ever heard the term, “Opportunity Cost”?  Opportunity cost is defined as: the loss of potential gain from other alternatives when one alternative is chosen.  It’s a powerful business concept but doesn’t get the spotlight it deserves.  This concept affects owners, managers (at all levels), sales people and professionals.

Your Product, Your Marketing, Time Management and Opportunity Cost

Are you missing opportunities by spending major time on minor things?

Developing your product and marketing it are the 2 most important, high-value tasks in your business or career.  Your product and your marketing of the product will produce more income now and set the stage for automatic income (repeat business & referrals)  in the future.

The best way to make $100 per hour is to stop doing $10 per hour work.  Most of us are on the mouse wheel trading time for dollars.  We fool ourselves with a long to-do list crossing off low-value tasks, responding to texts, emails and unscheduled phone calls.  We get a lot done on paper but it’s often minutia we should be paying a $9.50/hour assistant to do or not doing any of it at all.

Invest Major Time in Marketing and Product Development

Assuming you have a product to sell, whether a tangible item or a service, let’s focus on marketing it for now. When was the last time you can honestly say you dedicated major, uninterrupted time on planning your marketing and executing the plan?  No phones. No email. No interruptions. Inventing or discovering a marketing tactic which makes selling faster and easier is going to impact your income faster than anything else.  Sure, it’s easier said than done.  But it can be done and it must be done if you have any hope of doubling or tripling your income.

“It’s no in the dreaming, it’s in the doing.”–Mark Cuban

An investment of just two 1-hour segments each day for focusing on major, high-value task is probably all it takes to make a huge impact on your business. It’s not easy, but nothing worthwhile really is.  If you study time management (and who doesn’t), this is one discipline which is actually very easy to do because it’s not hard to make an unbreakable appointment with yourself at the same time every single day.  Tip: Do this first thing each day and you’ll feel better and more productive. Everyone has their “best” time of day for energy and brain power.

Examples of Major Time Investments Toward Marketing Your Product or Service

• Networking.  Get out there and meet more people. Be consistent in your networking. Show up and add value to others who network. Networking is a marathon, not a sprint but it works to stay the course.
• Writing. Write a blog post for your website or for someone else’s. Other blogs (like this one) already have an audience.  Getting published extends your reach drastically.
• Calling clients for sales, requesting referrals or to introduce them to something new.
• Create a video.  Utilizing video for attracting leads is easy today. There’s probably someone in your industry doing it successfully. You can too.  All the equipment you really need is within 3 feet of you right now…your smart phone.
• Create a direct mail piece with 5% conversion rate. (It’s a beautiful thing to have a message that pulls a consistent response)
• Write a book.  It makes one hell of a business card.

“Is this the best use of my time?” What a great question!

Here’s a question which takes it a step further: Ask yourself “what ONE THING I could do to make more money faster so everything else could be done by others or not at all?” Then ask yourself, “what else?”. Sit quiet for an hour. Make this your first 1-hour investment in this exercise. Make a big list and then narrow in on the best 3-5 things you can do. Now you know where to invest major time for the rest of the year.

Aside from the highest-value tasks, everything else you do is trading away opportunities which await you if you were to be investing in “the majors”. This is opportunity cost. Keep this concept in your conscience by asking yourself constantly, “Is the the best use of my time?”

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Article contributed by Andrew Mazer, Founder of Small Business University and the King of Mazer Marketing