You have your product, you have your space, you have your website, you have your small business loan, you have your budget. You can breathe a sigh of relief, right? Not so fast. It has only just begun. As a small business owner, you will have no shortage of decision making events on a regular basis. Which holidays should we observe? How much paid time off should I offer my employees? Should we change vendors? Should we expand? Should we narrow our focus? It can certainly seem overwhelming and may even give you a few more grey hairs. However, there are many ways, as a small business owner, that you can navigate these questions and determine the right answers for you and your business. After all, the way we make decisions regarding any aspect of our lives is not completely black or white and emotions certainly do factor into how we make choices. The good news is that you have already made one of the biggest, most important decisions you will make: decided to follow your dream of becoming an entrepreneur.
Just the Facts, Ma’am. Just the Facts
While emotion will never be completely removed from the decision-making scenario (nor should it, as there is a great deal to be said for listening to your gut), ensuring that you have gathered all of the information on your small business, will help you make smart decisions that are based on both intuition and information. Additionally, take the time to thoroughly analyze the information; don’t be afraid to ask for outside input from trusted friends or mentors. A third party will be able to evaluate the information without allowing emotion to play a part in how things are being seen.
How do you gather this information? Through any number of avenues, including running budget reports, marketing analytics and good old-fashioned conversation. Do you have reason to believe you need to do something to improve customer satisfaction? Don’t be afraid to talk to your employees about it and engage your customers. Generally speaking, people will tell you what they want, if you just ask them.
In addition to having all the facts regarding your own business, it is important to know how your competitors are doing business, as well. No one is suggesting you commit espionage or plant a mole within the offices of your rival small business! But, just as you are gathering press clippings and media reports on your business, take a look at what is being reported on your competitors.
Know Your End-Game
Always keeping an eye on both your short-term and long-term goals is important for any small business owner, particularly if you want to be making smart decisions. It can be quite easy to get side-tracked, whether it be day-dreaming about the day that your small business has grown into an empire or contemplating switching online payroll services. While these are certainly important things to be considering, on a day-to-day basis, it’s key that you always be mindful of what it is you want and the potential outcomes of your decisions. While there may always be scenarios that you didn’t foresee, playing the tape through to the end as best you can is additionally beneficial in finding that balance of allowing both your head and your heart to have a role in decision-making.
No matter what the decision is with which you are being faced, often times taking a look at employee morale will serve as a guide. If your goal is to expand your business (open another location, offer new products, delve into ecommerce), then considering current staffing capacity, morale and ability to hire additional staff will keep your current employees happy. And, a happy employee is far more inclined to do what they can to help you in meeting those expansion goals.
There was once a line in the television show, “The West Wing” in which a new White House staffer was told, “the President likes smart people who disagree with him.” Additionally, President Abraham Lincoln famously appointed to his cabinet, his political enemies, a cabinet that would go on to be considered one of the strongest and most effective presidential cabinets in history. Certainly, Sir Edmund Hillary needed the guidance of Tenzig Norgay to climb the summit of Mount Everest and even business rivals Bill Gates and Steve Jobs occasionally sought guidance from one another. The point being that any successful entrepreneur knows that they must sometimes seek guidance from others when it comes to making decisions that may effect their business. (Even if that means that you may not always like the guidance or input that you receive.)
Is your small business large enough that you have managers of different departments? Seek their guidance on various topics; after all, you employed them as managers for a reason. And, don’t limit seeking their guidance solely on those issues that directly apply to their jobs. For example, just because someone is your Human Resources Manager does not mean that they may not have some valuable suggestions regarding an upcoming marketing campaign. After all, chances are, this HR Manager is a consumer and has witnessed plenty of clever marketing campaigns, as well as bad ones.
Mentors, professors, trusted friends, vendors and applicable business partners can also prove to be valuable sources of information. Additionally, joining your local Chamber of Commerce or Small Business Association is always a positive way to gain feedback and guidance from fellow business professionals and entrepreneurs.
Take a Deep Breathe
It’s not very often that a decision needs to be made in that very moment. Chances are, short of a true emergency situation, you can take the time (even if it’s just a few hours or until the end of the day) to seek guidance, gather information, and weigh your options. Making a decision, spur of the moment, out of fear or panic will not do you or your small business, any favors. Even in those rare situations in which you will need to make a decision sooner rather than later, it’s likely that you at least have the time to take a walk around the block or meditate (if that’s your thing) for a few minutes to clear your head.
As discussed, smart decisions are made when there exists a balance between the head and the heart. The same is true regarding balancing risk and reward.
When a gambler is at the black jack table and they have been losing money, they tend to swing wide in one of two directions: they either begin betting on everything in the hopes that something will stick, often losing even more money in the process, or they become extremely conservative with their bets, in turn reducing their chances of any wins. When it comes to decision-making, many small business owners tend to behave the same way.
Any decision you make as an entrepreneur has the potential for risk. The key is to balance that against reward, making smart, sound and measured business decisions. Making rash, risky decisions out of panic because your sales are down or playing it too close to the vest because your recent marketing campaign only missed it’s target by a small margin, can end up having an adverse affect on your small business in the long-run. If you are unsure as to how to best measure risk versus reward, again, don’t be afraid to consult with fellow professionals.
Take Everything as a Learning Experience
The simple fact is that from time to time, you are going to make what turns out to be the wrong decision. It’s okay. Guess what? You’re human! And, there is no small business owner that hasn’t been in the same position. Rather than beating up on yourself, take it and learn from it. Chances are pretty slim that there is any decision that you cannot walk back from. There is always an opportunity to right the ship, as it were. Evaluate what worked and what didn’t. Learn from it, so the next time, your decisions will only be that much more informed.
There will always be any number of factors that play a role in how you make decisions for your small business, and as every situation will be different, the factors will often be different. Just continue to gather information, ask for help, take the time you need, and evaluate, and you will be on the right path to making sound business decisions.