As humans we make thousands of choices every day to weigh up good over bad decisions, and it’s no different when it comes to opportunities. Just because an opportunity presents itself in a bright and shiny package with a pretty bow on top, doesn’t necessarily mean it’s the right choice to make.
It’s essential to consider the opportunity cost of any situation if we hope to make intelligent choices. An opportunity cost represents the potential benefits an individual misses out on when choosing one alternative over another. Put differently, the cost of sacrificing alternatives by making a particular economic choice.
Opportunity cost = the difference between what you’re sacrificing and what you’re gaining.
It can be easy to overlook opportunity costs because they are intangible, however, having a clear idea of what you are giving up by choosing one thing over another is a critical factor in making good decisions.
How is opportunity cost defined in everyday life?
Opportunity costs are often neglected when making higher priced purchases such as the decision to stretch the budget and invest in a full ECM solution versus a managed-print solution. If you walked a potential client through the opportunity costs, what are the odds that they might change their mind?
There are three key factors involved in opportunity cost: money, time, and effort.
These questions can help to make wise long-term decisions
By being realistic and sensible when making decisions, you can confidently choose what is best for you in the long-run.