Opportunity Cost

WEEKLY DEVOTIONAL BY PATRICE TSAGUE

What opportunities are before you to launch a new business or grow an existing one? Have you assessed the cost of pursuing that opportunity? Do you know the benefits of counting the cost? 

Opportunity Cost

Like many entrepreneurs, I have struggled over the years about which opportunities to pursue at different points in my journey.  Since I began my journey to develop the Biblical Entrepreneurship program and build the Nehemiah Project, I always maintained a part-time contract that provided me with the stability that I needed until the revenues generated through teaching would be able to sustain my family.  

At a certain point, however, I reached the conclusion that if I was going to experience the type of success that God had in store for me, then I would also need to give myself fully to the primary purpose that God had for me.

As calculated and strategic as my actions had been in the past, I now wonder if I should have made this decision sooner. The feeling of getting up every day and being single-minded on that which God has called you to do is refreshing and rewarding.  There is no greater joy than to be earning a living doing that which God has called you to do.  

If I was guilty of waiting too long to devote myself fully to my primary mission, many entrepreneurs are guilty of moving too early. I have counseled many entrepreneurs who, out of their zeal to do God’s will or their frustration with their job or current workplace assignment, have quit their job to devote themselves fully to doing their own business. But then they realize that their business is not able to match the salary they had given up to start it, and in some cases, it is not even able to provide them with enough money to provide for their basic needs.  

The result of moving ahead of God’s timing can be years of frustration in trying to make ends meet, coupled with family trials and pressures. Some even end up going back to working full-time and forsaking business altogether. They mistakenly conclude that business is not for them or that God had not called them when the reality is that they had not considered their opportunity costs. Opportunity cost is the benefit or value of what you must give up to acquire or achieve something else.  

Jesus understood the importance of opportunity cost, and He used the term when He was recruiting His disciples. He knew that if He did not challenge those who desired to follow Him to evaluate what they must give up, and also their willingness to do so – that is, count the cost –  then they would not last long with Him.

With this in mind, He clearly stated the opportunity cost of following Him in Luke 14:26: you must give up your father, mother, wife, children, brothers, sisters, and even your own life. Jesus’ disciples had to see that the benefits of following Him were more valuable than their family and their lives. (note that the Greek word translated in English as “hate” in Luke 14:26 means “to love less” or in other words, to prioritize loving and following Jesus above all else).

Have you assessed the opportunity cost of following Christ?  

As Jesus explained to the multitude, the benefits of assessing your opportunity cost are that you are able to pursue the new opportunity wholeheartedly, and you will not have to turn back mid-way and face the embarrassment of not finishing. 

How many things have you started that you were not able to finish? You thought it would be worth it because you only considered the expense involved, but you did not consider the opportunity cost of forsaking what you were already doing.  

As important as it is to consider the opportunity cost of following Christ, you must also consider the opportunity cost of expanding an existing business or starting a new business. The questions to ask yourself are:

• Will the revenues generated from this new business or this expansion be equal to or more than the alternative?  

• If you do not pursue this opportunity, what will you be doing with the time and the money you would invest into it? 

How do you assess the opportunity cost for your business?  

To assess your opportunity cost, you must consider the following questions :

1. What are you currently doing to generate revenue? 

2. How will it be impacted as a result of pursuing this opportunity?

3. How much money do you need to spend on this new opportunity?

4. What are the other alternative uses of this money?

5. Will this new opportunity provide you with a greater spiritual, financial, and emotional reward than the alternative uses of your time and money?

No matter where you are in business, it is never too late to ask yourself these questions, as it is better to learn early of any mistakes and to make the necessary course corrections rather than continuing on the wrong trajectory. Though you should never pursue a business opportunity whose opportunity cost is greater than the benefits, you must remember that the benefits of following Christ far outweigh your opportunity costs, no matter what the sacrifice may be.

My prayer for you today is that God will give you the wisdom to assess your opportunity costs, so you can make wise decisions as you consider His will for your life and business.