At my PLF Live workshop, someone approached me with a challenging question: “What is the ONE THING that has made all the difference for you and your success? What should I focus on as my business grows?”
When people ask me how to get started, my advice is simple: start building a list and focus on selling what people on that list truly want. But when it comes to the most important thing for business growth, my answer is “opportunity cost.”
Opportunity cost, as defined by Wikipedia, is “the cost related to the next-best choice available to someone who has picked among several mutually exclusive choices.”
In simpler terms, it's about what you have to give up when you choose between different options. For entrepreneurs, this often means the cost is time.
The Importance of Choosing Wisely
When you're starting out, you have limited capital and time. Every decision you make carries weight because the wrong choice can set you back significantly.
Opportunity cost isn't just about money, it's about the time and effort you'll invest in each choice.
Imagine you're an entrepreneur launching your first product. You have two promising opportunities: developing a new software tool that everyone is buzzing about or focusing on building a community around your existing products.
The software tool seems exciting, and you’re tempted to dive in. But after spending weeks and a significant portion of your budget, you realize that the tool isn’t a good fit for your business.
The time and resources you invested are gone, and you have to abandon the project.
Meanwhile, the opportunity cost is clear – you could have spent that time and energy nurturing your community, engaging with potential clients, and solidifying your core offerings.
This highlights a crucial aspect of developing a growth mindset for business.
Understanding that every opportunity comes with a hidden cost… It's not just about the financial investment but the time, energy, and focus you sacrifice.
When you decide to pursue one path, you must acknowledge that other potentially rewarding paths will be left unexplored, at least for a while.
Managing Your Opportunities Effectively
I heard Dean Graziosi once use this analogy… he said it's like he has a bookshelf that's completely full. If he finds another beautiful book he wants to buy… Well, he can. But that means he has to take one of the other books on his shelf and throw it away.
This perfectly captures the concept of opportunity cost in business. Imagine your business opportunities as books on a shelf. You only have so much space – time, energy, and resources.
When a new opportunity comes along, no matter how enticing it is, pursuing it means you have to give up something else.
You might need to set aside a current project, delay another promising venture, or reduce the time spent on nurturing your community.
Think of it like juggling. You start with two balls, then add a third, and perhaps a fourth. But eventually, adding another ball becomes too much, and you risk dropping them all.
Each new opportunity is another ball to juggle. If you keep adding without considering what you need to let go, you'll end up overwhelmed and less effective overall.
So remember, having choices in your business is great, but each choice comes with an opportunity cost.
The Increasing Impact of Opportunity Cost with Success
Of course, once you start to have success, then the issue of opportunity cost becomes even greater.
Here’s the deal… the more successful you become, the more “opportunities” you will have. This is what we call “deal flow”… you start to have success, you build up a series of assets, you prove your worth… and all of a sudden everyone wants to do a deal with you.
And deal flow is a GOOD thing. It’s one of the reasons why it's easier to go from $100,000 to $1,000,000 than it is to go from zero to $1,000.
But as you get into the deal flow, it's easy to get distracted. You only have so much time, energy, attention, assets, etc… and every time you make a choice to pursue an opportunity, you’re giving up something.
Usually, for entrepreneurs, that something is time.
The Key to Success
Making the right decisions taking into account opportunity cost is one of the biggest factors in the success of your business.
When you focus on developing a growth mindset and are mindful of opportunity costs, you can make smarter decisions that will propel your business forward.
If you want to start or grow a successful online business, you need to launch. Understanding opportunity cost is just the beginning. To truly succeed, you need a proven strategy that aligns with your growth mindset.
Learn the proven formula responsible for over $1 BILLION in sales – in every kind of market imaginable. Sign up with your email here to get Launch Quickstart – a FREE four-part training for starting a business you love.
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