Title: Why Is Opportunity Cost So Important in Business? | SB
Headings: Why Is Opportunity Cost So Important In Business?
Why Is Opportunity Cost So Important In Business?
The Importance of Opportunity Cost
The Implications for Small Businesses
Measuring the Most Effective Way to Spend
Widening Your Knowledge and Making Better Decisions
Enabling Better Management and Ownership
Enabling Better Leadership
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Content: maybe email marketing, for example, or print magazine advertising (depending on your target audience). The opportunity cost here is obviously worth it, especially when compared to the more extreme option of blanket spending or, indeed, not spending any money at all. Widening Your Knowledge and Making Better Decisions
Of course, it is not always possible to have access to – or be able to contextualise – the bigger picture when making important decisions in business. Often, there are far too many variables, ranging from external factors such as consumer trends, changes in taxes, and natural disasters, to internal factors such as labour shortages, cash crunches or malfunctioning equipment. Unfortunately, in a lot of cases, you can only develop an accurate idea about the opportunity cost of a decision after that decision has been made. Take the example of fidget spinners, for instance: you may remember that they were something of a popular fad a few years ago. What if you – as many real-life companies did – decide to get on the bandwagon and manufacture them as part of your toy business? This seems like a sound choice; many people would argue this is a textbook case of identifying a lucrative trend and simply attempting to meet consumer demand.