Opportunity Cost | Smart entrepreneurs have an edge

Who do you work with and do they know the value of your time? Opportunity cost is the benefit given up by engaging in an activity instead of another.

Is it just me, or are all of the ways that technology was supposed to make life easier actually having the opposite effect? I am old enough to remember the days before VR. Old enough to remember the days before social media. And cell phones. Even old enough to remember the days before remote controls and colour TVs. In my opinion, it was exciting and fascinating to watch good products get better. When our colour TV replaced the black and white model, there was no looking back! Maestro phones, the “rewind to start of song” feature and microwave ovens were sweet advents of my time that made life just a little bit easier.

The next decade or so was more of the same. Gizmos and gadgets rolled out, each better than the last and each seemingly improving my quality of life. This went on somewhere into the late 90s, maybe even the early 2000s, and then it started to slip. And it wasn’t just technology. It was the quality of the products. The level of customer service. The integrity of warranties and insurance policies.

It was like everything had reached a peak and the idea of continuous improvement was lost in the race to be first, not best. The big ball of consumerism is rolling downhill and gaining momentum fast. And we’re all paying the price. We’re paying with our dollars, our sanity, our well-being… we’re really paying with our lives.

In line to return an item? Time ticks on. Calling support again? Time ticks on. Fighting with a device that has locked you out? Time ticks on. Waiting on a tarmac while staff shortages result in bags not being loaded? Time ticks on. Learning how to use an app after recent updates have changed the entire interface? Time ticks on.Turning your wash machine on and off four times until the lid sensor finally decides that the unit is “locked” and you can now do your laundry? Time ticks on.

So get to the point. The point is, as time becomes more and more scarce, we need to be more and more frugal with it. While we may not be able to stop the massive consumerism boulder that is gaining speed down the mountain, we may be able to sidestep it and find our own bits of sanity. First, you need to understand the value of time, which will enable you to grasp the concept of opportunity cost.

Some of you may know this term, and most of us understand this intuitively. The frustration you feel when your time is being wasted is your psyche recognizing that you could or should be doing something else. We have a certain level of tolerance for the unexpected, but in today’s world, aggravation can build ALL DAY LONG while your attention and energy are zapped by never-ending problems that really shouldn’t be yours to solve.

It starts with making better choices

If you’re an entrepreneur trying to make a buck, you need to get your head fully around this term and start applying it on the daily.

Who do you choose to work with and do they know the value of your time?

It used to be that when you hired an “expert” in a given industry you were buying yourself an opportunity. The transaction ensured that your time would be free to be better spent elsewhere or the ensuing service would realize a benefit that translated to a net gain.

I remember the days of gas stations that were fully serviced. The pleasant “ding ding” announced my arrival as I rolled over the air hose operating the ding-a-linger! While you were using the washroom and loading up on snacks, someone was checking your fluids and cleaning your windshield while fueling the next leg of your journey. These people were pleasant and relatively good at their job. You had a little bit of social interaction and typically left this place of business with everything you expected and more.

Fast forward to today, and rare is the station that is fully serviced. You will be fortunate to find one that even allows you to set the pump to fuel while you clean your own windshield and check fluids. Whether or not a washroom is available is a fun game to play. Or, my personal favourite, waiting to see if the receipt will print or if you need to see an attendant (what attendant!?) is a super fun way to be reminded of the insanity of it all… like doesn’t going and standing in line inside to get your receipt completely negate any potential gain that was achieved by you now becoming the gas jockey?

Some people will say “what is the big deal?”, just pump your own gas. The problem is, it’s not just gas. And we are simply overloaded. So what can you do?

Less is more

Simplify simplify simplify. When choosing a new service provider, contractor, solution, etc. you need to choose wisely. There is an option, app or gadget for everything these days. Our best advice is to keep it lean.

If you find a great service provider, have them handle as much as possible for you. When looking for a digital solution, our secret is to find apps or programs that solve multiple business problems. For example, we use Constant Contact to help manage our Digital Marketing contracts. We can schedule and send email campaigns AND plan, schedule and post to all connected social media channels. Since we handle most of our client’s websites, we love the integration it provides for lead capture and sales funnels.

Not particularly deep, we actually prefer the simplicity of a tool like Constant Contact. Often we have clients come to us with CRMs and ERPs that are incredibly advanced and robust; problem is, they have no idea how to use them. We can then look at one calendar and know when and how we are communicating to you.

Takeaway: when hiring a new contractor you should be freeing up your time for other things. If you’re spending time keeping them on schedule, fixing their mistakes or trying to learn their proprietary system you may have hired the wrong person. Click here to read more about hiring a contractor.

Reputation matters

Do your research. An extra couple of hours researching and reading reviews will save you hours in the long run if you hire a dud and have to start over with someone new in a month. What works for one person or business might not be the right fit for everyone. Word of mouth is a great way to find out names, but make sure that you trust the mouth you got the word from.

Takeaway: Spending time to compare options in the beginning can save immeasurable resources down the road.

Be choosey

It is commonplace and even recommended, that you have multiple touch points with the person or business prior to entering into a commitment. Use as many methods of communication as possible. Email, phone and a face to face meetings will give you an idea of how they communicate. Do they respond quickly and efficiently or do they waste your time beating around the bush? Maybe they simply can’t communicate in a way that resonates with you.

And don’t just think about long-term contracts, think about other ways you commit your time, money and energy to a particular objective. Using our fuel analogy above, perhaps you urinate frequently (lol, washroom reference, are you still with us?) or require receipts for business. Think about these things before signing up for a particular company’s rewards program.

Takeaway: If you’re annoyed with a prospect at any point in the selection process this might be a good indication that it’s not a good fit.