Are there things in your business that you shouldn’t be doing anymore?
Things that should “just die”?
Today I want you to watch this video from Don Miller. Don is the author of Building a Storybrand. And he is a marketing expert.
The video is all about “opportunity cost.” And how it may be costing you thousands of dollars.
Here’s the definition of opportunity cost: A benefit, profit, or value of something that must be given up to acquire or achieve something else.
It’s found by asking this question:
How much money are you losing by NOT taking a better opportunity?
I thought of 4 recent examples of this principle in action at our farm.
We stopped doing the Perrysburg farmer’s market 2 years ago because of the the concept of opportunity cost.
I was the one who staffed that market each week. It took a half day to get things harvested. Then I spent an hour to pack and get there, another hour to set it all up. 5 hours sitting at the market itself.
On a good day we made $600-700.
I knew that I could spend that day each week doing something else that would lead to greater value. So we axed it. I ended up using that time to grow My Digital Farmer, AND build out new video and PDF content for the SLFarms Membership Academy, which has added a TON of value to my CSA members (and I now sell as a monthly digital subscription).
2. This season, we decided to outsource the packing of our fruit share to a local orchard.
I used to have to go out to the orchards twice a week, come back home, portion things out into bags, and pay staff to pack our fruit share into crates.
Now I call Ben at Quarry Hill and say, “I’ll pay you x dollars per bag” and you figure it all out. Find 3 types of local fruit. Pack it into containers. Deliver it to x location on Tuesdays. Send me an invoice.”
This has saved me 10 hours a week — no joke.
Plus I don’t have to WORRY — figuring out 3 different things to put in the bag each week could be stressful. Now it’s someone else’s job (who is far more networked with fruit than I am).
3. We purchased a box truck a few weeks ago.
At first, $12,000 seemed like a big chunk of cash to dish out. But now, the 2 of us no longer have to drive to Enterprise Rental every Thursday morning to get a delivery truck for one of our CSA sites, then drive back after our pick-up at 9:30 PM to return it.
We also aren’t paying a van rental fee (which is helping pay for the box truck). And we can “be home” by 7:30 PM and not feel like we’re running until late into the night.
The “win” here for us was psychological. We HATED Thursday night van-rental-return night. We were mentally and physically DEAD. And the last thing we wanted to do after a LONG sweaty day and delivery drive was both hop into a car and drive 20 minutes one way to return a van. Thursdays were never over until 10 PM.
Now they’re over by 7:30 PM.
4. This year, we cut over half of our “work share” staff.
For the last 10 years we relied on a crew of “normal” lay people to come and harvest our CSA shares and pack the boxes in return for a share. This worked out great for many years.
But over the last few years as we’ve scaled, we noticed that harvest was taking longer and the crew was slow due to inexperience. Plus, over the years, the group became close friends with each other. And as a result, the focus began to move more towards conversation and community building (when we really needed efficiency at that moment).
Harvest was going longer and longer.
Everyone was getting frustrated.
So this year, we pay our 4 seasonal crew members to harvest everything in the early morning (they’re a whole lot faster and more experienced). We kept our 3 best people from the work share staff, and their one job is to bag produce and pack the boxes via assembly line.
It’s only been 2 weeks, but so far we have been done by 6 PM using this new system.
BEST DECISION WE EVER MADE.
I challenge you to start identifying the “opportunity costs” in your business.
What could you “stop doing” in your business so that you can spend that time on something else that would lead to more value?
Sometimes the opportunity cost isn’t just financial… it can be peace of mind, increased efficiency, greater staff synergy, more family time, time to rest, personal development.
FYI: Every single one of the 4 things I listed above was scary to do — because it meant straying from what had become the norm. We were entering new territory, and what if our gamble didn’t work?
But what if it DOES?
Last week, I found myself “wandering around the house” looking for things to do. (I can’t believe I’m saying that out loud to farmers. But it’s true.)
Kurt said the same thing. We were so used to running around frantically for the last 10 years, that it felt “wrong” to be able to sit down and have dinner with the kids on Mondays and Wednesdays at 6:30 PM.
But it’s SO right.
Evaluate ALL the costs of your business model. Especially the opportunity cost.
Don’t be afraid to let things go that aren’t serving you anymore.
