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One of the first concepts I learned in business school was “opportunity cost.”
Opportunity Cost = The cost of an alternative that must be forgone in order to pursue a certain action.
In other words, the opportunity cost of the dollar I spend on a candy bar is every other possible alternative use of that same dollar.
Clearly identifying alternative uses is a profound way to look at resources…and one that isn't employed nearly enough.
Often we feel obligated to agree to requests for use of our time, money, and other resources. But if we stopped to think about what that “yes” really means, we might give a different response. When someone requests an hour of your time, your response should consider what else could be done with that hour, and then weigh the value of each choice.
When we realize that saying “yes” to one thing means saying “no” to a host of others, it makes sense to accept only those activities that take us closer to our ultimate goals.
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Alison Moore Smith is a 61-year-old entrepreneur who graduated from BYU in 1987. She has been (very happily) married to Samuel M. Smith for 40 years. They are parents of six incredible children and grandparents to two astounding grandsons. She is the author of The 7 Success Habits of Homeschoolers.