It’s kind of like if your very insistent toddler wants to grow tiny little cherry tomatoes and gigantic heirloom tomatoes but you only have the resources, time and space to grow one plant. Or if you need to make three stops to save the most money on groceries, but you really want to see the Packers beat the Bears.
And for small business owners, it’s knowing when to take the road that was once less traveled but continues to gain momentum as a best practice in the entrepreneurial realm. Supply and demand has done wonders for the virtual assistant industry, and in doing so has revolutionized the way small business owners approach this thing called opportunity cost.
In essence, opportunity cost is what can be gained by asking for help from experts to complete tasks that may allow a small business owner to spend their time on something they’re the expert at. Defined more scientifically in microeconomics, opportunity cost more simply is about making a choice.
“In the long run, we shape our lives, and we shape ourselves,” Eleanor Roosevelt once said. “The process never ends…and the choices we make are ultimately our own responsibility.”
Chances are if you are a small business owner, delegation is not your strong suit. It is your dream. Your passion. Your investment. And it’s hard to hand all of that off to someone (anyone) else. Yet opportunity cost is every small business owner’s responsibility. It’s every small business owner’s choice. And research shows it all starts with delegation.
It’s an essential part of any business, based in the simple understanding that no one person can do the tasks of 30 regardless of how badly they want to and how passionate they are about it. There are complicated equations and even more complex descriptions about opportunity costs, but what the concept means to small business owners is simple.
The good: Simply put, your time as an entrepreneur is exceptionally valuable, but that doesn’t excuse working around the clock seven days a week. Work-life balance is essential to staying productive, efficient and happy in any profession, but is particularly crucial for small business owners. Taking time to delegate tasks to someone else, like a virtual assistant who may be able to do the same thing in a third of the time, can be an incredible investment in the health, and wealth, of your business.
The bad: Trust is earned. It takes time. Especially when you’re passionate enough to start a business and build a dream from an idea. It can be challenging to put trust in someone you’ve never met to do something you’re not entirely convinced you can’t do better yourself. And it can go badly, even on well-trusted outsourcing web sites like Upwork. Despite the best efforts of third party administrators, scammers are out there, so it is important to proceed with caution, do research and make sure that if you opt to outsource a task it will be worthwhile.
The ugly: Just because Robert Frost mastered the art of making decisions with his poetic interpretation of what it means to take the road less traveled doesn’t mean it’s always sunshine and rainbows. Decision making is a tough part of business, especially since the concept of “opportunity.” Unpredictable by nature, it’s hard to know for sure whether the choice was the right one, whether it saved money, whether it was worth the investment. Chances are it was, and there is research to support it can be, but it’s always necessary to weigh all the options before making an informed decision.
The stakes are a bit higher for small business owners than missing out on a captivating game of football or not being able to craft the elaborate recipes with heirloom tomatoes from the garden. Despite that, small business owners can, and do, benefit from understanding the good, the bad and the ugly pertaining to opportunity costs. It may not be right for every business, but it could be right for you.