Economics is more personal than most people realize. Every choice about how to allocate your resources is an economic decision, and time is your most basic resource as a writer. You expend time on your work in order to get income. Sometimes you know exactly what you’re going to do today and what you’ll get in return. A lot of the time you face choices. Which of your customers should get your attention first? Should you put them aside for a while and look for new income opportunities? Should you keep working on a time-consuming project or give it up as a lost cause?
Two economic concepts are useful in making these decisions: sunk cost and opportunity cost.
Sunk cost is what you’ve already expended and can’t get back. Most people weigh it too heavily when making decisions. If you’ve spent three days on a piece and realize your chances of getting anything for it are tiny, the time you’ve spent isn’t a reason by itself to put in more effort.
Sure, it’s a matter of pride. A “get the job done” ethic is good. You don’t want to just dump all those words you’ve written and leave them unread. Finishing a tough project may improve your future chances with the customer. But some customers are impossible to please and not worth the effort. Or you’re in over your head and can’t produce quality work on a topic, no matter how hard you try. The work you’ve sunk into a task doesn’t mean you have to sink more. You have to weigh the additional time it will take against the customer’s value, your commitment to the job, and the income you expect.
When you make this judgment, you need to take the opportunity cost in mind. Opportunity cost is the value you could get by doing something else but won’t. Instead of continuing on a time-draining project, you could look for other work, go back to projects that are in your queue, or take some time to relax and have fun. If you’ve got a lot of clients competing for your time, then you’re in good shape. You’ll reduce your opportunity costs by dumping a project that isn’t worth it and making better use of the time.
If it’s a slow week, it may be worth finishing a project even though it’s frustrating. As long as the reward is reasonable, counting payment for it and opportunities for future work, you aren’t incurring a lot of opportunity cost. If you’re almost done and it will just take one more push, it won’t cost you much.
Don’t count the opportunity cost just as the number of words you need to write or the pay per word. Some tasks are easy to finish; you already know what you want to say, and you just have to type the words. Sometimes finishing the job requires heavy research. When you’re a writer, the main resource to manage is time. If you sink a lot of it into a job for a small return, that’s poor resource management. If you know when to keep pushing and when to cut your losses, your work is more satisfying and profitable.
You got to know when to hold ’em, know when to fold ’em,
Know when to walk away and know when to run.