Simply stated, it is the cost of not enjoying the benefits, profits or value associated with the alternative forgone or best alternative choice available. Hence, the opportunity cost of owning a business is the profits that could be earned in another business using the same amount of resources.

Put simply, opportunity cost is what a business owner misses out on when selecting one option over another. It’s a way to quantify the benefits and risks of each option, leading to more profitable decision-making overall.

What is the opportunity cost of owning a business? Opportunity cost is the value of the best alternative forgone in making any choice. When owning a business, the profits that could be earned in another business using the same amount of resources are the opportunity cost.

All economic systems strive to achieve a set of broad social goals, including economic efficiency, equity, freedom, growth, security, and stability. How these goals are prioritized—and how successful an economy is at attaining these goals—influences the quality of life for all its citizens.

Socioeconomic status is the social standing or class of an individual or group. It is often measured as a combination of education, income and occupation. Examinations of socioeconomic status often reveal inequities in access to resources, plus issues related to privilege, power and control.

Factors Affecting the Growth of Small Businesses

• Behavioural and personal traits. A business leader’s characteristics such as behaviour, personality and attitude can certainly have an impact of the growth of the business.
• Business structure and management.
• External factors.
• Location.

5 Economic Indicators That Affect Business Success

• Consumer confidence. Consumer confidence measures the overall consumer optimism about the state of economy.
• Economic growth and development. Economic development is probably the most important indicator affecting business success.
• Inflation.
• Interest rates.
• Unemployment.

Small businesses provide character and individuality to a community. It is neighbors helping neighbors ― friends helping friends. Small businesses are the backbone of their local communities. More specifically, if you spend $100 at a local business, roughly $68 stays within your local economy.

The unintended negative effects of business activity on people and places are called social costs and include:

• noise.
• pollution.
• visual blight.
• congestion.

So the facts are that big businesses create recessions and depressions, are national security threats, have proven to be net job destroyers, require government bailouts, encourage politicians to create bad regulations, and are infamous for crony industrialism and lack innovation.

Corporations aren’t generally evil. The lone exception might be individual corporations that have a bad or evil corporate culture or they produce an evil product. Lack of accountability or lack of interest in customers or stakeholders can be another cue of lack of ethical behavior.

The growth of big businesses can hurt small-business profitability. Big businesses can deploy more marketing professionals and product designers to gain share in new markets. Small businesses are usually at a competitive disadvantage because they do not have comparable resources.

Another difference between small businesses and large companies is that small companies often focus on a niche market, while larger companies tend to offer more products and services to a wider variety of consumers.

As any company leader knows, the biggest cost of doing business is often labor. Labor costs, which can account for as much as 70% of total business costs, include employee wages, benefits, payroll or other related taxes.