What is opportunity cost and how can we use it to improve our efficiency?
Opportunity Cost is a commonly used economic principle. It’s a powerful principle, yet, it’s a frequently ignored principle, especially in ministry.
What did you do last week? That’s an important question, but there’s a better one. What did it cost you to do what you did last week?
The true cost of doing something includes opportunities that were given up to do said thing.
Why are those opportunities given up? Because you used up finite resources that cannot be used up again. You used up resources like time, money, and materials. That’s the essence of opportunity cost.
Your opportunity cost to watch TV for 20 hours last week is what you gave up to do that. Did you give up spending time with your family? Did you give up reading a book you’re interested in? Did you give up working on your presentation? You might have thought that that those hours of TV were free, but if you slacked off on work or school to watch your favorite programs, those may have been the most expensive shows you’ve ever seen!
Opportunity Cost in Ministry
Many times we don’t count the opportunity cost of doing ministry. For every thing we say yes to, we’re forced to say no to something else. If I spend $10,000 on an event, obviously, I’ll have $10,000 less to spend on other things. Many times we understand this when it comes to money because we’re all used to having limited financial resources, but we still don’t get it when it comes to time and energy.
I’ll tell you that I believe time and energy are even MORE limited than your financial resources. Why? Because your organization’s finances are not limited by time, however, your time and energy are always limited. You can always make more money. Someone can write you a million dollar check or you can develop a business that makes money while you sleep. But your time and energy are not renewable in any way. No one can write you a check for more energy. No one can develop a business or process when adds to your time. There is literally nothing more important than time and energy.
Think about what your goals are. Think about what your organization’s goals are. Is everything you do advancing those goals or are you fighting against yourself? Many times I find that we’re our own worst enemy.
By saying yes to launching a new ministry social media account (and the hours and energy that go with it), I’m saying no to further developing current social media capabilities, developing leaders, recruiting volunteers, enhancing curriculum, my own personal development, and many other things that ministry requires.
It pains me to see ministries, churches, and individuals trying to do everything. You can do anything, but you can’t do everything, at least not very well. Ultimately, it means that you’ll fail at most of it.
To do ministry well, we MUST understand the principle of opportunity cost. What do you think about opportunity cost?
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