Opportunity cost is the concept that making a decision, choosing an option or allocating resources to one activity has a corresponding cost of not choosing a different option. In other words, for any decision we make in business, there is a trade-off; if you spend resources on one thing, you have less to spend on something else. Put simply, opportunity costs are the value of what is given up when pursuing a specific course of action. As a business decision-maker, it’s essential that you understand opportunity cost in order to make well-informed decisions. This means thinking ahead and weighing the possible outcomes, so that you can be sure you’re making the right choice. After all, the eventual success or failure of your enterprise may depend on it.