Episode 141: When you start a business or side hustle, you need to consider the opportunity cost of everything you do. Here’s what you need to know about measuring the opportunity cost of business travel.
Measuring Opportunity Cost as a Business Owner
One of the main considerations for entrepreneurs and side hustlers is opportunity costs. Well, if it isn’t a main consideration, it should be.
As a business owner, every task you complete should have value. When resources are limited, it can be hard to get in the mindset of taking on extra monetary expenses to free up time. However, measuring the opportunity cost can give you a better insight into value over price.
Opportunity Cost in Business Travel
Kevin recently took a business trip with Amtrak. He had to evaluate the cost of driving versus the cost of taking the train. At a base level, driving would have been cheaper. However, measuring the opportunity cost of travel time tells a different story.
By paying for a trip on the train, Kevin was able to work while traveling, and the billing equated what he paid for train tickets for 90 minutes of travel each way. The alternative would have been cheaper in costs, but five hours driving each way and having to carve out time to get the necessary work done.
Another consideration is that he was well-rested. He didn’t have to stay up late to get his work done that he couldn’t while driving, and wasn’t burnt out when the trip was over.
Considering opportunity cost is essential as an entrepreneur, whether it comes to your transport or outsourcing. Taking care of yourself and using your time effectively is necessary because if you burn out, your business suffers.