Business and Opportunity Cost

I’ve been musing on Opportunity Costs lately.  Opportunity Cost is a term that I learned in my high school economy class.  Opportunity Cost basically means that anything you get requires you to give up something else.  The Opportunity Cost of buying a new stereo is that you are unable to buy a new computer.  The Opportunity Cost of watching a movie is that you’re unable to spend the time playing with kids, or reading a book, or anything else with that time.

I’m pretty convinced that the simplest way to have a happy life is to make sure that the value of the things you choose to do, buy, have, be, outweighs the accompanying opportunity costs. Unfortunately that isn’t always easy to do.  Sometimes the thing we get isn’t happy even though the opportunity cost is much worse.  Getting to stay at an unpleasant job doesn’t make us happy even though unemployment is worse.

This has been on my brain as Howard and I make plans to get from where we are (Employed by Novell, frequently stressed, Schlock barely paying for itself) to where we want to be (Schlock paying for the family, Howard home more, actual free time).  There are large, carefully laid plans for getting us from here to there.  We don’t talk about these plans much because sometimes talking about them would break them.  People ask why there isn’t more merchandise, they ask why don’t we do this thing, or why on earth we did that thing.  Mostly I don’t answer because the answer involves a treatise on economics and Good Business Practice which they didn’t ask for and probably don’t want to listen to anyway.

Howard and I have been running a business for over 10 years.  It has never been a profitable business and the goals of the business have changed significantly, but we’ve learned a lot.  We’ve learned how to be professional.  We’ve learned how to properly account for the money and inventory.  We’ve learned what things we can do for ourselves and when the best solution is to develop relationships with other businesses.  Schlock is building slowly and merchandise is coming slowly because we are making sure that we don’t go running out on a limb and swamp the business with expenses that will kill it.  We went down that road before when we were doing music.  I don’t want to go there again.

It’s all about opportunity costs.  Every penny that goes into shirt production can’t go into book productions.  Which will sell better?  Probably books.  But to prep the book takes time.  Time to find a publisher and distributor.  Time to put the book together.  Every slice of time that goes into Schlock production doesn’t go into Novell, or Family, or relaxation.  Time must be parcelled out carefully or things fall apart.  It is all pretty delecately balanced and trying to move faster will send things crashing and breaking.

Moving slowly when I want to run is incredibly frustrating.  I’m here and I want to be there.  I want to be there right now