Calculating opportunity cost and walking away from $1,000,000

Argh!

Should we buy it or not? 

Fuck. I really want to! 

But we’d be spreading ourselves pretty thin. It’d be rough if it went to shit.

We could just do it and wait a year before growing it…

Yeah, but we’ve still got so much other stuff on the go right now. 

This is just a distraction…

You’re right. We can’t. 

Are we out?

Yep, we’re out.

This was a conversation I had this week.

I finally passed on an opportunity I’d been looking at for a year.

You see, after you’ve been in business a while, opportunities start to flow your way.

There are those complete randoms who reach out to you with terrible proposals sold as ‘amazing opportunities’.

You know the ones.

It’ll be a commercial agent selling you on a fabulous new precinct.

A business broker tempting you with an off-market deal.

Or even your mates asking you to invest in their latest start-up. 

That’s on top of your own wild dreams!

But every now and then, one rolls in that’s actually a good opportunity.

And over the last 12 months, I’ve had one rattling around my in brain causing all sorts of tension.

But, on Thursday I decided to pull out. 

Delete.

I’m moving on. 

Why?

Because I finally accepted that the opportunity cost was too large.

It was a distraction pulling me away from my core daily activities.

And this type of distraction has been a constant theme in my life.

There's no doubt you’ve faced the same thing.

So today I wanted to put a huge spotlight on those shiny opportunities distracting you. Then figure out what to do about it.

But first, let me explain why the hell I passed on that million dollars.

It was one of those rare good deals I mentioned earlier.

An opportunity to buy another business and grow it.

I freaken love the business I was looking to buy. I’m a regular customer of theirs.

It’s profitable, scaleable and priced okay.

And I can see a pathway for explosive growth.

It even fits with my purpose.

So why’d I turn it down?

The key members of the business are leaving. And even though we had the skillset, it requires a massive amount of my time and energy to implement ideas for growth.

That means less time focused on growing my current business.

Let’s say it costs you 200 hours to put plans in motion and build a team.

(pretty conservative really)

You have to ask yourself if those 200 hours would be better spent working on your current business instead.

Could you create the same upside/opportunity without the distraction?

A few years ago I wouldn’t have even asked myself that.

I probably would have just said “Fuck it. let’s do this”

But today the answer was a clear NO.

I can’t afford to invest the time to get the results.

So what changed in a year?

Honestly, it was the decision to FOCUS!

You see, we entrepreneurs are always tuned in to seek new opportunities.

Looking for the next new thing

(AKA being attracted by new shiny objects).

Don’t get me wrong, I still want to build empires and I still assess new opportunities out of curiosity. 

But not at the cost of my daily focus on things that are already moving me forward.

And I’m learning that this type of laser focus is the key to extraordinary growth.

It’s how you build that empire you've got in your mind.

But, it took me decades to learn the true value of focus.

Here’s how I got my shit together and finally stopped splitting it across too many things.

1) Define Your Purpose

If your only purpose is making money you’re going to be distracted by every opportunity that comes your way.

A problem I did have at one point in my life.

In that mindset, hundreds of opportunities will grab your attention and you’ll struggle to make real progress toward any one of them.

Instead, know your long game and the sandbox you want to play in.

Everything outside of that is a distraction disguised as an opportunity.

2) Put A Value On Your Time

Most new entrepreneurs leverage their time because they don’t have cash yet.

So when an opportunity lands that only requires time (and no cash).

You jump straight in.

Sometimes this is great.

Other times it means your effort is split across multiple projects and your results will be diminished, delayed or destroyed.

This is what would have happened to me because it was a relatively cheap buy but required lots of skilled time.

3) Value Your Energy

Startups and business transformations suck your energy.

It’s brutally hard to build momentum.

So just remember, often it’s a better use of your energy to do more volume of what you’re currently doing instead of starting from scratch all of the time.

You get more bang for your buck.

4) Focus Makes Millions

I still love writing business plans for new opportunities. 

But once you’ve done it, calculate the total time and cash you'd be spending to make that new project happen.

Then ask yourself if you invested that time and money in your current business, would you get the same or better results?

The answer is nearly always a clear YES.

And not only that, it’ll be faster, easier and better because you already have momentum.

That's precisely why I passed on the opportunity to acquire that business.

But the best bit?

When you do all that and finally decide no, it renews your commitment to your current business and you feel like you're unstoppable.

That’s it today for today

I hope it helps.