Opportunity cost: understanding, function, and for example in a business
Understanding opportunity costs
Do you often hear about opportunity costs? What is the importance in business? Opportunity costs are basically a theory of economic behavior choices with a certain amount of money. For example, you have $ 100. With that money, you can choose to buy a data package or buy fast food.
If you buy a data package, then you lose the opportunity to enjoy the delicious fast food. However, if you decide to buy fast food, you will lose the opportunity to have a data package.
This one concept is not only related to money and items you want to buy, you know. This concept is also closely related to time, happiness, future investment, and so on. Here are some examples of this concept in terms of several aspects:
Concept of time
You decide to not sell at the Car Free Day Sunday. You get free time, but potential profits certainly disappear.
You intend to take Masters in the Department of Communication to become a lecturer. Your potential for becoming a lecturer is more wide open. The risk, you lose some money in the present, and lose time.
Concept of happiness
You have to overtime in the office. Instead, you get overtime money. However, his happiness will disappear.
Example in business
The concept of opportunity costs can be applied in running a business. For example, you decide to open a Boba drink business and leave a job with a salary of $ 400.
So, the cost of opportunity is $ 400 if viewed from the salary left in order to open the Boba business.
Well, verbally from these results, you will try hard to get more than $ 400 as compensation from the opportunities left behind.
In the same case, for example you spend $ 15,000 to open Boba’s business. So, you leave the potential for vacation to Singapore with the money for example, in order to open a business.
Example in a property business
Property effort is a matter so wide. Many interests. Is you one of them? Understanding opportunity costs is quite useful, you know.
For example, you have an unused house. You decide to rent it out. You will get rent. Instead, you will not be able to occupy the house. Not to mention if there is damage.
Or, you want to build a boarding house. You open opportunities for income aka routine monthly income. However, you will need a cost of renovation, renting a supervisor, and so on.
Function of understanding opportunity costs
The following are the things you will get:
- Help calculations in business capital. Taking into account the cost of opportunity, then you can guess the capital that must have, and help you in making mature business planning from the capital.
- Determine priority. The best priority is something that must be decided carefully in the business. Don’t prioritize the wrong things that actually harm you.
- Save business cash. Opportunity costs occur because not all things can be achieved. So, by applying this theory (even though you have money to buy all choices), you can save business cash and focus on important things.
- Looking for the best alternative to your business
So, actually the concept of opportunity costs is not difficult right? Before starting a business or career in the professional world, understand this so you can make the best and most profitable decisions. Also record every fee you spend and every income on the good bookkeeping system so you can monitor the overall financial current of your company factually.
In order for Your business is growing and increase the number of customers you don’t forget to advertise through the service Froggy Ads, You can start to advertise Your products, so that later You can increase the visitors on the portal of Your online business. Froggy Ads is an online advertising service that can help You control all campaign Your product.
These are our different traffic types you can buy:
- Push Ads – 11 billion impressions daily (Minimum CPC $0.003)
- Native Ads – 2 billion impressions daily (Minimum CPM $0.10)
- Display Ads – 5 billion impressions daily (Minimum CPM $0.10)
- Pop Traffic – 750 million impressions daily (Minimum CPV $0.0001)
We use Adscore to exclude bots and low-quality traffic.
Our advertisers getting an average of 74.000 conversions every day from our traffic.
Why Choose Froggy Ads?
Live support 24/7, Dedicated ads experts help to launch, run, and optimize ads according to your KPI, Transparent ad platform, Track your ads’ performance in real-time and scale-up, Very low minimum deposit, Proprietary technology, Enable only high-performing parameters of your ad campaigns automatically, Set up to 16 unique targeting options for the highest ROI.
As you know, is FroggyAds.com a self-serve (DSP) ad network that provides high-quality, high-performing, and brand-safe worldwide traffic for your campaigns. Right now, we have more than 50.000+ active campaigns from 15.000 active advertisers.