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Showing posts with the label alternative costs

Just my thoughts #0607

When an organizational leader is busy, the organization is at risk. There is a high probability that work is abnormally concentrated on the leader or that the tasks currently being pursued are unsuitable for the organization. If leaders fail to address the right issues due to their own busyness or if tasks are not properly distributed within the organization, a crisis will soon arise. Being busy does not equate to sincerity. Instead, we must recognize the warning signs of limitations to survive. - 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”