What could inaction be costing you in your business? We tend to focus on the benefits of proactive decision-making within our business, but sometimes fail to consider how costly inaction can be as well. Because the opportunity cost of a decision is not always assigned a direct value, it can be tempting to drag our feet which can have such negative effects. Failing to take action can impact more than the numbers in your business. Inaction can cause stress, anxiety, fear and have many consequences to our mental and physical health. In this episode, we take a deep dive into how failure to invest in key areas of your business can cost you so much in the long run.
What we cover in this episode:
- 00:30 – Introduction
- 02:13 – What are some of the costs of inaction?
- 06:40 – Start by investing in a team
- 14:01 – Don’t be afraid to invest in technology
- 18:27 – The importance of efficient systems design
- 21:10 – Consider the long-term opportunity cost of a decision’s ROI
- 22:25 – Missed opportunities due to fear
What are some of the costs of inaction?
The costs of inaction can be vast. In addition to the obvious costs, like monetary savings associated with finding a new system or program for your organization, the costs of inaction can seep into your mental and physical wellbeing. Negative emotions like stress, fear, overwhelm and lack of control are just a few of the mental consequences, which can all begin to impact your physical health in the long run.
These costs are hardly worth the steps it takes to lie the right foundation and set yourself up as a business owner with the proper tools and people for delegation. Taking action may be difficult today, but the costs of inaction over time can wear you down, impact every decision you make and stunt your growth.
Start by investing in a team
If you’re like most business owners, you began your company solo or with a couple of partners. Although there is such a thrill to starting a business, we often fail to realize that it’s up to us to make sure everything gets completed. I’m sure that you wear so many different hats, that it can eventually become challenging to scale your business.
That’s why growing your team is one of the most important action steps that you can take. Hiring people who specialize in different areas can relieve you from having to do so many tasks, allowing you to focus on the meat and potatoes of your company. Many people start off by hiring an assistant to help with daily work so that they can focus on the growth of their company without getting into the weeds of those tedious tasks. Other important positions to consider hiring sooner than later is a project manager, CPA/CFO, marketing team, and legal advisor. These team members will ensure that your business will properly grow and decrease your chances of misstepping.
There may be fear of delegation and it can be difficult to let go. You may also have concerns about the cost of expanding your team, but consider the opportunity cost of a decision like this. The ability to offload work that someone else can handle will positively impact the state of your mental health as well as the amount of time you gain to invest into working ON your business rather than IN your business. That investment can lead to true growth, which can improve your revenue and justify the expense of a team.
Don’t be afraid to invest in technology
Many business owners find the thought of upgrading their technology very daunting. The tech world is growing exponentially, and some find it difficult to keep up. Although it can be overwhelming, you cannot fall victim to inactivity when it comes to investing in the technology that’s being used for your business.
It’s important to have a good general knowledge of the software and technology that is being used by competitors and your industry’s leading businesses. You can’t afford to fall behind the curve in a day in age where technology is heavily valued to bring a better customer experience.
Yes, investing in technology can begin to get on the costly side, but consider the opportunity cost in the long run if you fail to keep up.
The importance of efficient systems design
As business owners, we must periodically revisit our processes and procedures in different areas within the company. We have to check in on our departments and ask key questions. Is there a more efficient way of doing this? What are my competitors doing? Are our systems making it unnecessarily challenging for my team and potential clients? These are questions that should be thought about and discussed from time to time to ensure that it’s not being neglected. Because it’s easier to continue with established processes, it can be easy to ignore issues that could be causing bottlenecks or other problems in your business.
Creating and upgrading great systems are vital steps for the growth of your business as well. Failure to do so will prohibit your business from properly scaling because it will always run into system roadblocks as you add team members, get more clients, add-on services, etc. It can create a plateau within your business that has nothing to do with marketing or needing to hire more people, but due to a system issue.
Consider the long-term opportunity cost of a decision’s ROI
When making a decision, we usually make it based on the immediate ROI (Return On Investment) that we can see. Most of us avoid spending money or time on something that we don’t reap the benefits of in the near future, which is why so many business owners fall into the trap of procrastinating to invest in the mentioned above areas of business.
With that being said, when considering the opportunity cost of investing in a team, technology, or systems design, we have to play the long-term game. We can’t make the mistake of solely thinking about the immediate satisfaction, but how these decisions will pay off down the road, or else we’ll continue to put it off thinking that we have time to get to those things later on. Not realizing that the inaction will hurt your chances of having the resources to invest in the future. If you want to ensure that your business is around and thriving for the long haul it’s important to take action in these areas now.
Missed opportunities due to fear
You pay for inaction with opportunities. Missed opportunities arise when you fail to take action or effectively make a decision. When you think ahead, invest and properly plan for the future, you’ll be prepared when opportunity comes knocking. So many companies, such as Kodak and Blockbuster, have gone out of business because they refused to take action at the appropriate time.
What we can take away from both of these companies is that inaction will cost you something in the short or long-term. If you continue to be inactive, it may eventually cost you your entire business.
Inaction can be a sneaky way to cost yourself time, money, and emotional and physical wellbeing. We talk about inaction in your business and the not-so-obvious costs that can accompany passivity as a business owner. We also talk about the key areas of investments that can make a big difference in the growth of your business.
When we make a decision to break out from the fear of the unknown and the risk that comes with investing in our businesses, then there’s nothing but opportunity for growth. Being paralyzed by fear will cost you peace, health, and the opportunity to have a flourishing business. It may seem overwhelming, but with the proper planning and action steps, your business can be on the track to success!