Small Business Story: Boutique Hotel in Spain

I recently visited Spain (excellent country by the way, second trip there). Worked from San Sebastian in the NE to the Rioja region to Madrid. Spent two (2) nights at a boutique hotel. It was a 2019 remodel of a 1600’s farmhouse. Nothing like sitting in their courtyard in front of an 11th century city wall. How does that relate to fractional organizational leadership?

One of my observations is that an “arms length” leader can better evaluate the situation and be prepared to walk away from ideas that are not working. I supported a business recently with multiple vertical markets but one of the vertical markets was underwater. The founder was committed to that vertical and felt that the situation would turn around. My analysis was not as much “it is failing” as “what else can we be doing with that cash.” I think pushing a narrative that is directly against the founder is not as effective as talking about the opportunity cost. Quick primer:

Opportunity cost refers to the potential value or benefits that one foregoes when choosing a particular option over an alternative. It represents the cost of not choosing the next best alternative when making a decision. In essence, it underscores that resources, whether they are time, money, or other assets, are limited, and allocating them to one option means sacrificing the potential gains that could have been achieved by choosing another. Recognizing and understanding opportunity costs is crucial in decision-making, as it helps individuals and businesses assess the true costs and trade-offs associated with their choices, ultimately leading to more informed and efficient decision-making.

Think about the hotel. You could have not remodeled the farmhouse. You could have torn the entire thing down (probably cheaper). But what succeeded was remodeling for today’s travelers while also highlighting things like the 11th century wall where you could celebrate the history.
Think fractional and think about opportunity cost.





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