As you track your expenses, costs for labor, websites, admins, and a multitude of other items will often make their way onto the balance sheet. However, some of the most impactful costs are those that are invisible to the eye--and these can lead to you operating in a low energy state.
When you operate in a lower energy state, you won't be as charismatic, mentally sharp, or emotionally intelligent--all of which combine to lower your performance across the board.
As you go about maintaining high levels of energy and continually growing your business, keep in mind these three types of costs.
1. Opportunity cost
Opportunity cost is essentially another term for a trade-off. We live in a finite world where doing one thing means not doing the other. However, thinking about the opportunity costs in every situation in life can quickly lead you down a one-way street of neuroticism.
The big arching goal with opportunity costs is to be cognizant of the choices you make every day and how they equate to the results you get with your business and personal health.
Opportunity cost presented itself early in my career when I had to decide on business partnerships and potential affiliates. While these opportunities could've provided a short-term influx of cash, I had to consider the long-term ramifications. I decided not to take those partnerships because the opportunity cost was too great in the future, as it could affect my brand and how I wanted to be positioned.
As you consider your opportunity costs, ask yourself these two questions:
- What is it costing me right now to keep doing what I'm doing?
- Is the pain of doing the activity greater than the pain of not doing it?
Answering those questions will make your decision much easier since it forces you to operate with a big-picture point of view. While money is a key area of focus, also look into the areas concerning potential key relationships and overall impact.
2. Stress cost
How stressed are you on a daily basis? While living a stress-free life isn't a realistic goal, living a life with high amounts of stress doesn't have to be your typical daily existence.
Stress is kryptonite to your health, energy, and productivity. The time you spend doing activities that cause unnecessary stress will decrease your energy and productivity for the next few hours afterward.
An underrated area of stress for me is juggling social media with my coaching and writing. While social media is a great free tool for brand building, it can also be an emotional drain. When I realized this, using a news feed blocker and scheduling posts made my life better.
As you look into calculating your stress cost, it doesn't have to mean taking drastic action; the small things often equate to the biggest improvements. Take into account your emotions, important personal relationships, and daily mundane activities.
Activities to manage stress start with delegating, journaling, meditating, and consistently getting proper amounts of sleep.
3. Time cost
Besides energy, time is your next most valuable currency. The first question to ask yourself is: How much is your time worth?
This initial question helps you delegate tasks that you shouldn't be doing since they don't fall into your primary area of expertise. If you're still in the bootstrapping stage, then you'll have to do some activities that aren't inside your primary area of expertise, but it's still important to have a list of things that will be delegated once you hit certain benchmarks within your business.
After gathering up how much your time is worth and looking over the activities you perform, the next area to assess is your personal performance.
A big area that drained my time was multi-tasking. According to the American Psychological Association, there are three types of multi-tasking to be aware of:
- performing two tasks simultaneously
- switching from one task to another without completing the first task
- performing two or more tasks in rapid succession
While being highly skilled, networking, and staying on top of the latest technological advances inside your industry are necessary, the invisible costs mentioned above are often the missing link to taking your business to the next level.