Fooled by the Law of Diminishing Returns

Is more always better?

We all know the answer to that. But the trickier question is, “WHEN is more actually not better?” As our businesses grow, it’s easy to get pulled into adopting more systems, adding in more headcount, scheduling more events, developing more products.

At what point do these things start to have a diminishing return in revenue? Don offers a few key questions to ask yourself when you are considering doing more.

Don Dalrymple

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At some point, the effort and cost are not worth it anymore. The Law of Diminishing Returns kicks in when building a business or even building a life. More investment of your time, money and attention may initially have high returns, but then at some point, the rewards taper.

Will more efficiency make a large impact on your revenue?

How many more relationships start to become a liability to manage rather than pure enjoyment?

Does more money create more happiness after a certain point? They say $75K is that point of diminishing return from research studies.

Sometimes, I can’t find the motivation to do more. Perhaps, that law of diminishing return is instinctive and I’m only responding. Or experience simply shows me that more does not equal better. In fact, more may mean cost.

I see it with business owners that add more headcount and find more headaches or layers of management…

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