Economists use the term "opportunity cost" to describe the cost of taking one action instead of another. Here's an example that should bring the concept close to home: Let's say I choose project A over project B. If project A makes me $10,000 and Project B would have made me only $3,000 with the same effort, I have chosen well. If the reverse is true — Project A made me $3,000 and Project B would have made me $10,000 — the opportunity cost of my choice is, in dollar terms, $7,000, and I have not chosen so well.

To the extent that I was even conscious of such choices in the early years of owning my business, I often felt that they were being made for me. Once I was able to get my business to the point where I had some control over it, however, I began thinking about opportunity costs.

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