Knowing your Opportunity Cost

OpportunityOpportunity cost refers the cost of missed opportunity. Scarcity of resources such as time, capital or people forces us to choose something at the cost of giving up another. Opportunity cost is always quantified in financial terms, and it is a crucial component in every decision-making process.

When opportunity cost rises, the expected return from the business rises too. Opportunity cost exists in every business decision. If your business resources were to be used in a different way, you could always compute if the opportunity cost is worth it. Your resources may include not only working capital and fixed assets, but also quality of people and time. If you have employees who are not competent for the job, or lack proper training to handle certain tasks, then your opportunity cost is high. What you can do is to hire more competent staff or invest in training to improve productivity.

Marketing through Networking

Networking is a marketing technique done by an individual, rather than a company, to enhance contacts or personal connections for promotion of a product or service. Networking utilizes interpersonal relationships and social networks, and make the most of these networks to bring in more customers to the business.

Networking a great way to expand one’s business to a wider market beyond your current contact. You can extend your network by attending the right business networking activity or group for your business to secure you the most benefit. Avoid aggressive sales talk as this reflects the tactics of a desperate salesman. Learn to create perfect business spiels that may last only a few seconds but are still appealing. Learn to listen to other people and do not interrupt. Get into the business services when they are already called for. In attending networking events, be ready to present your business card as it is your primary networking tool.