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Showing posts with the label alternative costs

Just my thoughts #0765

Language has a grammar for communication. In other words, there is a form, and communication is only possible when society agrees on that form. Therefore, in communication, form is often more important than content. Different fields in society use different grammars and preferred language styles. For example, there are separate grammars and vocabularies used in law, and the same goes for marketing. This is especially common in advertising and public relations, where the form is usually more important than the content. In a world where focusing only on the form can seem showy, and emphasizing only the content can cause communication problems. - 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”