Opportunity cost is a key concept in business. When a product is late to market, the company has paid an opportunity cost. When a person takes a job that pays less than another, there is an opportunity cost. When I work with a client 40 hours a week as a contractor and disregard all the rest, suddenly have no work, and it takes me months to build up my client base… I paid an opportunity cost.
Opportunity cost is the “cost” of not enjoying the benefit of an alternative choice. The alternative choice can be financial, professional or personal. I weigh this cost on a regular basis.
Every time I give a quote or negotiate an assignment, I weigh the opportunity cost. Is this going to be a positive or negative contribution to my life professionally as a certified Spanish translator or a certified Spanish court interpreter?
These are some of the factors I consider:
Is this assignment likely to displace another one that pays better? If it does, this is almost like volunteering, in my mind. How much of this can I afford?
Do I have to sacrifice health, family commitments or other activities that make my life better?
I (almost) never set up a schedule conflict with family commitments, my voice lesson, choir rehearsal, my team meetings or my trainings. I love those activities!
Does this assignment move me forward as a certified Spanish translator or interpreter?
Will I learn something valuable or be connected with further opportunities?
Does this assignment set a pattern for a future relationship with this client?
Is this how I would like my colleagues in the translation and interpreting field to be treated?
Are the terms of the contract asking me to set aside my normal business practices, such as connecting with potential clients? I normally go to networking events, visit businesses, and otherwise connect directly with users of my services to get to know them better. I always learn more about what is needed in my field and sometimes I become one of their contractors.
Is the client limiting the use of my skills as a certified court and medical interpreter in an interpreting session, for example? I never tell my licensed plumber, electrician or doctor what tool to use on the job. They use their professional judgment.
We weigh it every day whether we know it or not. Weighing it analytically may be helpful. I use this term, opportunity cost, in my negotiations.