An opportunity cost is the cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.
If you decide to spend time working on accounting or other necessary management functions or take time with your family, functions that do not contribute to producing revenue, you have lost that opportunity and that will cost you money. You have to make time for all of that-just be very aware of how you are allocating you time , money and effort.
- If you decide to spend money on buying new furniture, you have lost the opportunity to spend it on something else. You have limited resources in time, money and effort. If you devote time money and effort to launching a new product or service, It will lessen the resources available to current products or services.
- Be very aware how you spend your time nd money especially when it comes to allocated time to marketing strategy and tactics. When business is doing well and sales are good small business owners have a tendency to decrease marketing efforts and look for quick fixes or a magic bullet (there isn’t a magic bullet).
- A sustained effective marketing tactical effort is critical to your success and growth of your company
- The total available time and energy to manage your business and marketing of your products and /or services is very limited. The time is limited to the time remaining it takes to perform your service or sell your product and service your customers. For example, if you install and service Air Conditioners and it takes 20 hour a week to do that, you only have 20 hours available for other activities.