Musings And Dialogue On Entrepreneurs And Decision Making (Part 2)

The following backdrop and questions apply to this part of the series of musings and open discussion on entrepreneurs and decision-making (Part 1 was here):

In many corporate environments, employees are very aware that time is money. For example, consultants become very accustomed to thinking about an hour of their time having a very specific dollar value, and that becomes a salient opportunity cost when they decide whether to spend time working on a task. Do you think entrepreneurs are as aware of the dollar value of time? Is this a good thing or a bad thing? Do you think it could explain some of your observed differences in decisiveness?

My thinking on these questions are that consultants tend to be more aware of their opportunity cost of labor than others, if only because bill rates are usually widely known in terms of $/hr internally within the firm and often with the client. From this perspective, however, I don't really see much of distinction between entrepreneurs and those salaried within a traditional company. I think it is atypical for entrepreneurs and those working within a traditional, non-consulting company to think in terms of either hourly opportunity cost or activity-based cost. In my experience, these latter groups are more focused on goals. I think employing the hourly opportunity cost concept to entrepreneurs and those working in companies could potentially be beneficial, but I have not seen a lot of this outside a manufacturing context.

What are your thoughts and experiences?


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