What is Opportunity Cost, and How Does it Affect Planning?
When you’re making important decisions for your company, you have to take a lot of factors into consideration. Every decision comes with costs, and some are more obvious than others. No matter what aspect of your company you’re planning—whether it involves shipping methods, distributors, travel, personnel or anything else—your decisions come with costs and rewards.
While it’s easy to overlook, opportunity cost is a force to be reckoned with. It can have big implications for your company. But what, exactly, is opportunity cost? Simply put, opportunity cost is the value of whatever you give up to make a certain decision. It is involved in every decision any person makes. Sometimes it is monetary and sometimes it is harder to measure, but it always affects our decisions whether we realize it or not.
When we make decisions, we choose to give up something scarce (usually our time or money) in exchange for something we want. We ensure maximum profits by minimizing opportunity cost losses. For example, consider the implications of throwing a party for employees during work time. The monetary costs of throwing a simple party include decorations, food, prizes and maybe some entertainment. However, you must also take into account opportunity cost—by throwing the party, you are reducing productivity and paying employees for work they aren’t doing. This could amount to thousands of dollars lost and is thus a factor to determine when planning your party. You may choose instead to do it after hours or cut the party short to decrease costs.
Once you understand opportunity cost, it’s easy to see how it influences business planning. If you invest $1,000 in a certain stock and lose $500 in the first month, you might think […]
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Worth a Thousand Words
If you are selling products online, it is absolutely imperative that you have high quality product photos. If you are selling digital products or professional services, you also need stellar photos on your website. Humans are extremely visual creatures, so you must clearly show what you want to tell. With the right pictures you can reassure your potential customers that you are a professional resource and you have what they need. So what characteristics are necessary for pictures to provide a solid assist to your sales effort?
First, the picture must be clear and sharp. The lighting must be right, not too bright and not too dark. It can be hard to see details if there’s not enough light or too much light. It is generally best to shoot in daylight because it is natural and usually adequate. The best light for shooting photos is early morning or late afternoon. The bright noon-day sun creates dark shadows under the eyes and nose.
Make sure the background of your picture does not detract from the most important part, the image of your item. If you have a messy kitchen or a shirtless uncle in the background, it takes away from the product. If the background is too light when you take the picture, it can fool the camera’s automatic light sensor into thinking it needs to close down the aperture. The result is that your product in the foreground looks dark.
The number of pictures is also important. Normally you want between one and three, but it all depends on the nature and complexity of your product. Ask yourself, “If I was buying this product, what would I want to see?” At the very least you […]
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Resources to Help You Learn How To Use the Internet
If you grew up before the internet was a necessity in every household, you might feel like you have some catching up to do in order to keep pace with current technology. Technology is developing at an exponential rate and many users feel overwhelmed by the rapid changes. Read on to find out about some great websites that will teach you how to make the most of your internet usage.
How to use a search engine
Without search engines, the vast wealth of knowledge that is available to us online would be useless. If we can’t find the information we need, it might as well not be there. Learning how to effectively use search engines is one of the most important skills an internet user can develop. Here is a link to an article that demystifies search engines: http://www.learnthenet.com/how-to/search-the-web/index.php. There is even a website dedicated to using one of the most popular search engines in the world: Google. Check out www.googleguide.com to learn everything you need to know about conducting searches with Google specifically.
How to send an email
Email is one of the most common ways people use the internet. As a child, I remember having an email service for at least a year before my family finally got an internet service that allowed actual surfing. A great guide on how to send emails is located here: http://www.learnthenet.com/how-to/send-email/.
How to bookmark a website
In your internet exploring, you will undoubtedly find websites that you want to be able to return to quickly and easily. Bookmarks are place holders that you can add to a list on your web browser that will […]
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PMI Coaching Talks About Repeat Customers
Getting your business noticed is expensive. As a store owner you’ve likely spent money on signage, ad space, and branding to make sure your customers know your name. Campaigning is an important part of owning a business, but even more crucial to your success is getting the customers who already know your name to come back, and bring their friends. Most business owners get about 80% of their profit from 20% of their customers. Just a 10% increase in customer loyalty could result in a massive 40% increase in overall business. Here are six tips to increase your average of repeat customers:
1. Make sure your product is worth coming back for.
There is really no substitute for a great product at a fair price. Most people wouldn’t be in business if they didn’t believe in their product, but there is always room for improvement. Ask your customers for their opinions on how you can improve, and listen to them – they are, after all, the ones who use your products the most.
2. Communicate with your customers.
Most disappointments customers face are because of misunderstanding – they expect a certain price, or a certain service that you can’t offer. Clear and polite communication of policies and prices at the beginning of a business relationship can manage a customer’s expectations and disappointment – and it can help you weed out customers that may not be right for you.
3. Make your employees happy.
Happy employees treat customers well. Everyone has bad days, but if an employee is disgruntled about their job, they are unlikely to go out of their way to help your business by being […]
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