Making good business decisions is never easy – and it can be especially difficult for an entrepreneur.
The ability to make good decisions is necessary for success in any business. In larger corporations, the decision-making process is a collaborative effort. Teams and committees evaluate the options. Studies are done to determine possible outcomes. When a final decision is made by an executive, it’s often at the recommendation of others' work and findings.
In an entrepreneurial venture, making decisions can be very different. There are rarely teams or committees to provide recommendations or studies. Resources are often limited, making research and evaluation less likely. Final decisions often rely upon the entrepreneur making the best guess as to how to proceed.
Entrepreneurs are required to make many decisions on a daily basis. When the entrepreneur makes poor decisions, the business will suffer. A flawed and ineffective decision process will lead to more bad choices than good ones. Poor decisions are one of the primary reasons the majority of many entrepreneurial ventures fail.
But an entrepreneur can make better decisions by developing some key habits.
1. First, an entrepreneur must have the ability to determine which decisions are truly important. They must also know which are not. When an entrepreneur becomes focused on a decision which has little impact on the success of the business, they are wasting time and resources. It also it takes attention away from focusing on the decisions that do matter.
2. Second, entrepreneurs should always consider the long-term impact of every decision. It’s important to realize that decisions made today will have an effect on the business tomorrow. If a decision being made today won’t be the right decision in months - or even years from now - it’s the wrong decision.
3. Third, entrepreneurs must consider how a decision will impact the company, before considering the personal impact. When making a decision as an employee, it’s natural to consider the impact from a personal career perspective. Successful entrepreneurs always understand that business success must come before personal success. Making decisions requires that same understanding.
4. Finally, every entrepreneur must have a network of outside mentors and relationships. And they must use that network when struggling with a major decision. There is great value in being able to reach out for advice from a trusted resource. If used wisely, a reliable network will be one of the most valuable assets of a business.
An entrepreneur will make more decisions in one week than they made in one year of working for others. But as business owners, their decisions will lead to the success, or failure, of their new business. Developing and using the right habits will lead to better decisions. This will give the business a much greater chance of success.