Buying into Opportunity Cost – Part 2
Opportunity cost is a pretty simple and intuitive idea. When you spend resources one way, you are unable to spend the same resources elsewhere.
If we spend $100 dollars on barbecue, we are unable to spend that same $100 on anything else that we might have otherwise. But opportunity cost is about more than just the literal cents and dollars dropped on the counter of a barbecue joint. At the end of the day, profits are equal to money made minus explicit AND implicit costs, so when applying the concept to your business, its meaning takes on a much wider definition.
Time as an implicit cost is often overlooked or undervalued when considering opportunity cost, but it stacks up fast. Considering that recent studies suggest we are wasting as much as 20 hours per week on low-productivity tasks, effectively looking at what else you could be doing with your time is an obvious idea.
One place where it should be easy to put some hours back on the clock? Technology.
In Part 1 of this series, we addressed how technology can act as a force multiplier, and how relying on people in your organization that were hired for completely different business goals was a terrible idea. You don’t go to your mechanic to have your taxes done. You don’t go to your accountant to have your haircut.
Rooting a tacit value on time wasted via technology shouldn’t be an afterthought, it should be a part of the game plan. The old adage is that an ounce of prevention is worth a pound of cure, and while we can quibble over whether the 16-to-1 ratio is accurate, few in the Lone Star State will question whether or not the apparent lack of planning was enormously costly during our most recent winter weather calamity.
Most Texas businesses lost time and revenue back in February, and many were at risk of losing far more. In a world where truth continues to be stranger than fiction, failing to plan continues to equate to planning to fail.
As a Managed Service Provider, Mentis Group believes at its core that proper planning can significantly reduce risk, and properly mitigate the opportunity cost of doing nothing. When treated as an enabler, technology bridges these gaps and magnifies your ability to pursue your business in real time.