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Showing posts with the label alternative costs

Just my thoughts #0710

Businesses are more likely to succeed if they are intuitive. Education should also be intuitive to improve the learning experience. Most famous entrance exam instructors communicate principles or knowledge intuitively. To teach well means to teach in an intuitive way. A good example of intuition is ‘advertising,’ because it must deliver the core message quickly. If you cannot intuitively communicate your business or identity, internal members will struggle to communicate effectively with outsiders. People subconsciously reject complex content and complicated delivery methods. Efficient communication saves money and also boosts purchasing power. To stay competitive, you need to be intuitive. Intuition means that a message’s meaning and purpose can be conveyed with just one sentence or one word without any extra explanation. - Joseph’s “just my thoughts”

Just my thoughts #0070

In business, capital means business funds. A successful entrepreneur often says, "I started my business without any capital". It's partly true, but it's a lie. The entrepreneur just said that capital means only cash. However, all kinds of businesses need to be fundamentally business funds in any even not cash. The entrepreneur didn't count the founder's labor cost. No inputs, no outcomes. The uncounted labor costs are called "alternative costs" or "opportunity costs". This comes from comparative advantage. If the entrepreneur doesn't accept the uncounted labor cost as a debt, the entrepreneur is equivalent to losing the profit due to opportunity costs. Please always remember this. There is no free lunch in this world. - Joseph’s “just my thoughts”