6 Tips for Making Better Business Decisions
- April 8, 2019
- Posted by: Quarles Business and Financial Strategists
- Category: Business Advice
6 Tips For Making Better Business Decisions In Your Small Business
As a small business owner, decision making can be stressful, especially when there’s a lot on the line.
However, decision making is one of the key aspects of the job description. Just like Neo in The Matrix, you will be required to make many decisions, both big and small.
Do you take the blue pill, clinging to the stubborn old ways of the corporate world even though they are no longer working?
Or do you take a risk, the red pill if you will, to become enlightened on how to make a change?
How can you know which will be the best choice, and how can you improve yours odds of making the right one?
If you struggle to make decisions, whether in business or life in general, the good news is that there are some reasonably simple steps you can take to prepare for just about any decision.
Before you read on, we have actually found a really helpful and interesting Ted Talk for you by Perth born Tom Griffiths called: 3 Ways To Make Better Decisions – By Thinking Like A Computer
So, now that you’ve had the pleasure of indulging in the wondrous world of Tom Griffiths mind let’s follow up with our 6 tips to make better business decisions!
Assess Your Options
When it’s time to make a decision in your business, you need to consider every option.
This may feel straight forward, but keep in mind that the best solution could be one that hasn’t yet occurred to you.
Gather the relevant information and consider what your available options are. Spend some time researching your decision. A quick Google search could open up a world of possibilities, or help you avoid some costly wrong choices.
Once you’ve created your list of options, you can start thinking about the impact each choice would have on your business.
Have an Updated Business Plan
Just about every aspect of your business is better with a business plan, and decision making is no different.
Your business plan should include goals for your business and the steps it will take to reach them, which is a critical part of the decision making process.
How can you make the right decision, when you don’t know where you’re going?
You’ll need to consider each option and how it fits in with your business plan. Checking your business plan when making a decision is an excellent way to make sure you stay on track.
Don’t have an updated business plan? Get your business plan looking up to scratch with our free business plan template!
Just download this simple FREE Business Plan Template Guide
Learn from Your Mistakes
“Those who fail to learn from history are condemned to repeat it” – Winston Churchill
Once you’ve been in business for a while, you will discover things you wish you’d done differently.
Mistakes are part of life, you can’t expect to be the perfect business owner from day one. Even the most successful companies have made some big mistakes, like the genius who came up with “New Coke”.
However, continuing to make the same mistakes is where this becomes a problem. Many people like to say that, ‘the definition of insanity is doing the same thing over and over, and expecting a different result.’
Here are a few tips on how to learn from your business mistakes:
Identify the type of mistake (what went wrong, and why?)
Take responsibility (don’t play the blame game, look at the role you played in any bad business decisions)
Look at other businesses (how are other businesses succeeding where yours failed?)
Change your business (if you identify a fundamental problem in your business, don’t wait around until it becomes a problem again)
Identifying your mistakes and taking steps to avoid them in the future is a great way to improve your decision making, trial and error is a tried and true method of improving.
Include Your Employees in Decision Making
Another way to start making better business decisions is to include your employees in the decision-making process.
When you make decisions by yourself, the process can become narrow and too focused on one outcome, involving more people will bring a new perspective to the decision, and help generate ideas that you weren’t considering.
Your employees may already have their own ideas to improve the company, but instead, keep it to themselves because there isn’t the right forum to discuss it. They will often have different insights into your business, especially if they are the ones who talk to the customers.
Communicating with them more and including them in decision making could do great things for your business.
Get Access to Financial Data
How much could you tell me about your business’ finances, right now?
Without keeping track of the proper performance metrics and financial data, it’s hard to know how your business is going, more importantly, it’s hard to make the right decisions when you don’t have all the information.
How can you make any hiring decisions, or decide whether to buy new equipment, or when to invest in advertising your business?
Financial data drives more informed and better decisions, so it is essential to have the right tools to do so.
When it comes to managing your finances, we recommend using the cloud accounting software Xero. Xero can help your business in many ways and gives you access to real-time business data, such as bank balances, invoices, cash flow, sales and more.
If you want to get started with Xero, book a free consultation and we’ll help you set it up.
Talk to a Business Advisor
The most reliable way to make the right business decision is by talking to a business advisor in Perth.
There will always be day-to-day operational decisions that you need to make yourself, but don’t be afraid to call in the big guns when it comes to the big decisions.
Our business advisors have the knowledge, skills and experience to help you make the right decisions to grow your business and avoid costly business mistakes.
Want to learn more about how our business advisors could help your business?