Anyone who has ever studied economics is quite familiar with the concept of opportunity-cost. Let me restate that. Anyone who has ever attended day one of an introductory economics course may recall hearing something about opportunity-cost. The idea suggests there is always a unique cost associated with each opportunity we are presented, and we will always favor a situation in which opportunity outweighs cost.

Common sense, right?

Well lets consider opportunity-cost beyond the realm of business and finance for just a moment. Instead lets think about the most seemingly insignificant day-to-day social situation and apply opportunity-cost. When was the last time you held the door for somebody as you were either leaving or going into a store? Do you always? Do you never? Or would you be more inclined to hold the door for an elderly woman but not a teenager? My point is this: In nearly every situation, we constantly are weighing the question of whats in it for me? against whats it going to cost?.

In the previous scenario, you would probably be more likely to hold the door for the elderly woman because you perceive a need for that door to be held. So theres an opportunity for you to feel good about yourself by helping someone else, and it only cost an extra second or two of your time. But you may be more inclined to hold the door for the teenager. Why? Perhaps you identify with that age group. The opportunity then would be added esteem in the presence of a peer, and the cost would be just a moment of your time.

But some people never hold doors for anyone. What about them? Maybe they dont care about esteem. Maybe they dont care about the perceived needs of others. In those situations, cost outweighs opportunity. After all, not everyone shares the same values.

Now lets get back to business. How can you apply opportunity-cost to your online business? Aside from just knowing your product and your market, you absolutely have to know the specific opportunity that your product provides each individual consumer within your market. Forget about everything you think the opportunity is. Frankly, what you think doesnt matter. Its not about you. Its about them, and its about their opportunity. Survey a group of your customers, and include the opinions of unsatisfied customers too. Find out from them what the opportunity is. Gather a broad base of opinions, analyze them, and make necessary adjustments.

Now lets look at cost. First of all, it doesnt matter how great the opportunity is if the cost is too high, and cost isnt just about money. Its about aesthetics, accessibility, and a wide range of other elements. If your website looks bland or unprofessional, then the cost of doing business with you goes up. If its difficult to navigate, the cost goes way up. If your customer service is sub-par or, if visitors question their security of information at your site, your costs will sky rocket. Remember to address those issues because, if you can lower the cost of doing business by those means, then youve automatically increased the opportunity you present others without having to fiddle around with the dollars and cents side of the opportunity-cost equation.

And one more thing: Never ever rely on the opinions of friends when it comes to the design of your website. Their opportunity is to improve their personal rank within your circle of friends, and their cost is a potentially damaged friendship.