Decisions, decisions! How do you make smart business decisions? Do you use your head, your heart or both? What if your gut instinct is pushing you in a certain direction? Do you follow it or stick to the facts?
Make a decision that works for you and your business
Smart business decisions are good for your bottom line but they also need to be ones that you as an individual can live with. And they need to be in line with your brand. Take The Body Shop for instance. The company built on founder Dame Anita Roddick’s championing of ethically sourced ingredients for natural beauty products boomed in the 80s and 90s. In 2017, its margins have taken a severe beating and L’Oreal are considering putting it up for sale.
Arm yourself with information
Focus on the facts. Without them, you can’t make any smart business decisions whatsoever. Management accounts and forecasts will give you the information you need to understand the various ways in which the decision you’re considering will impact your business financially, and how it could affect the way in which you run your business.
Learn from past mistakes but keep a sense of perspective
We all make mistakes, in business and in life. The great thing about mistakes is that you can use them. Identify what went wrong and resolve not to repeat those actions but don’t let past mistakes make you dread the prospect of making decisions in the present or future. Your mistakes can shape your future actions but they don’t have to define them.
Listen to your clients and identify what they actually want
Remember that you’re in business because people need or want the services you provide. When thinking about how to make smart business decisions, keep that first and foremost in your mind. How will a decision affect your ability to deliver what your customers come to you for?
Here’s an interesting Steve Jobs quote from the New York Times Obituary:
‘Mr Jobs’ own research and intuition, not focus groups, were his guide. When asked what research went into the iPad, Mr. Jobs replied: “None. It’s the consumers’ job to know what they want.” ‘
Understand what you’re getting into
Here’s a good lesson from Sir Alan Sugar, whose electronics company Amstrad ran into trouble in the 1990s:
“We expanded too quickly and we screwed up. We didn’t have enough understanding of the technology as it got more complex, and I take total responsibility for that.”
Source: BBC News.
Keep an open mind. Consider alternatives
We’re all biased. Especially when it comes to things we’ve set our hearts on. But if there’s a viable, smarter alternative that could actually be better for your business in the long run, bias needs to be set aside to make room for a little objectivity. The alternatives might not be exactly what you were aiming for but one or even two might actually be better than the one you started with.