Decision-making in business is inevitable if you are going to achieve goals and ultimately lead your team to see your larger vision, but that doesn’t mean it comes naturally. The sheer volume of decisions we face as business owners can be overwhelming. There is also fear associated with decision-making tied to the consequences of making the wrong decision. Today’s episode is focused on overcoming the difficulties of making decisions as a business owner and the fear that can accompany the process.
What we cover in this episode:
- 01:21 – Making tough decisions
- 08:52 – Why aren’t you making a decision?
- 12:19 – Not making a decision is making a decision
- 25:01 – Don’t avoid it
Making tough decisions
Some decisions can be very difficult to face, especially when they impact others. Making decisions for yourself is usually much simpler because you’re the only one who has to face the consequences. If you make a mistake, you are able to address any mistakes on your own and move on. Making decisions as a business owner isn’t always so easy. Many decisions have the potential to impact you and then have a trickle down effect, impacting your leadership team, your team of employees, administrative personnel, and potentially clients and others. As the number of people affected by your decision increases, so does the weight that decision carries. As the weight of your decision increases, the more likely you are to fear making a mistake. Many individuals don’t know how to make decisions, regardless of the level of impact, and some simply don’t want to make decisions. When making decisions, there are six tips that can help you weigh your options.
#1) Remove your emotions and feelings from factors that influence your decision.
It’s common for people to succumb to their emotions and forget about the business. Focusing on how something feels or whether or not someone’s feelings are going to get hurt will not help you make the best decision for your business.
#2) Focus on the facts.
Identify the facts by weeding out opinions and feelings. Ask and answer questions like, “What is the impact of this decision?” or “What is this decision going to do for my business?”
#3) Look at the big picture.
When answering questions to obtain the facts, think about how the decision will impact all areas of your business. For instance, if you have to make a decision to let a teammate go, there are numerous impacts. Upon first blush, removing someone from the payroll would be a cost saver. However, if another employee has to work more hours, or even over time, to compensate for losing a teammate are the cost savings as significant as you first thought?
#4) Consider the long-term impacts.
Before making a decision, stop and think about the impact it will have on you, your team, and your business’s long-term success. Your decision should be made for the greater good.
#5) Weigh the benefits and the impacts.
Identify if there are other options for accomplishing your goal. If there are, determine if the other options mean less negative impacts. If there aren’t other options, think about what all you will gain from the decision. Then, see if those benefits outweigh the impacts.
#6) Get perspective by having conversations with those who have been in your shoes.
Talk to different people who have been through similar situations. Getting different viewpoints gives you more information to consider. Knowing others’ experiences, struggles, issues they ran into, what worked out and what didn’t can not only trigger new questions for you to ask and gain additional information. These things can also help you plan in advance how to solve problems if you move forward with the same decision. Again, more information helps you see the big picture. Find a mentor who can help guide you through the tough decisions.
Why aren’t you making a decision?
If you are avoiding making a decision, there is a reason behind it. Are you avoiding it because it’s easier for you to keep things the same? Do you like the path of least resistance? Typically, people have a comfort level and once you are outside of that comfort level, decision-making becomes more difficult. In almost all situations, communication is key. Conversations need to take place. What are some of the most difficult decisions to make as a business owner?
Letting an employee go
Impacting people is not easy. Making the decision to fire an employee is difficult and uncomfortable, especially if they’ve been with you for a long time. If you’re swamped with other things, the path of least resistance is to let things continue on the way they’ve been going. It’s never the right time to fire someone, but at some point you are going to have to face the situation. Following the steps above can help you wrap your head around whether or not this can wait. How much are they holding your business back? Is there another position for this person that will be a better fit? Sometimes the answer is no and the realization is clear that it’s best for everyone if they find another opportunity elsewhere. The conversation is uncomfortable, but it has to take place. Be willing to have an honest conversation if a partnership isn’t working because you’ll be better off.
Another tough decision people don’t necessarily want to make involves raising fees. Increasing prices isn’t usually the most well-received message and as a result, there’s always a possibility clients may take their business elsewhere. But, at the end of the day costs rise frequently on almost everything. If your prices raise occasionally, and not dramatically, your clients most likely won’t be surprised. When you plan to increase your fees, inform your clients. Open communication is a necessary component to the success of your business. Avoiding fee increases keeps your business stagnant.
Changing your business model
You may need to change your business model. That’s not an easy decision to make because it takes a large investment of time and effort, and your leadership team may be swamped with other things. However, it might be the right decision if you’re not getting traction in the process or the strategies you have currently. So you may need to stop and revamp.
Firing bad clients
The success of your business can also be inhibited by bad clients. Severing a relationship with a client, like firing an employee, can be uncomfortable. But, if you’ve gone through the steps to evaluate the situation and you know the benefits of letting a client go strongly outweigh the benefits of keeping them, take your destiny into your own hands.
Not making a decision is making a decision
In our last podcast episode, episode #63: Inaction – What Is It Costing You?, we talked about inaction. Inaction is the path of least resistance, but what are you missing out on by continuing business as usual? What is that costing you? It’s possible that your inaction isn’t costing you anything monetarily. Instead, it’s costing you opportunity. For instance, if you are stalling to raise fees, you are missing out on revenue. You aren’t bettering your team dynamics by getting rid of somebody who’s not the right fit, so you’re losing out on that benefit without really realizing it.
To reference one of our favorite tools, again, Traction by Gino Wickman, he has a list of 10 commandments of solving issues and one of those is, “Thou shalt be decisive.” While discussing the importance of decision-making in business, Gino writes, “It’s less important what you decide than it is that you decide, so decide.” In Traction, Gino Wickman then goes on to talk about how most successful entrepreneurs are the ones who can make decisions efficiently and effectively. They’re not stuck in the stage of information gathering. Yes, you need the information. But, if it takes a year to collect all the information and you still don’t have a decision made, that’s a problem. Don’t wait on finding the perfect answer because it doesn’t exist.
Don’t get stuck. Try something and track it.
Your business is never going to get ahead if you stay stagnant. Trying something is better than not doing anything at all. To quote Wayne Gretzky, “You miss 100% of the shots you don’t take.” While you are trying something new, track what is happening and what you are learning. Then, if your attempt doesn’t go well you still have information gathered. You can use the data you’ve captured to review what happened, why it didn’t work well, identify what changes can be made, and you can then move forward in a different direction.
Be realistic. You will make mistakes.
You are going to make the wrong decision from time to time, but you can still turn that around and take away something positive that you’re able to apply in the future. It may not be the next decision you make, but maybe five years down the road you’re making another decision that’s similar and you can take that lesson with you. You’re not going to be successful if you don’t try new things, make improvements and try again. Push your business to be more. You’re not going to make the exact right decision every time and you shouldn’t hold yourself to that standard.
Reframing the definition of a failure or mistake can help you make decisions more easily. Instead of considering a decision you made a mistake or failure, look at it as an opportunity to learn. No matter what, there is always something to learn. When you focus on the idea that every time you make a decision you will learn something, fear is less prevalent. Making a decision is just that, making a decision. It shouldn’t be considered a failure or mistake, regardless of the outcome. Your decision will be beneficial for you or it will tell you to do something different next time.
You may find that your decision is not the best for a particular situation. When that happens, pivot. Decide what you need to do to resolve the situation. Be resilient. Get back up. Keep trying. Take all the knowledge you’ve obtained and make better decisions moving forward.
Consult with trusted advisors.
Additional perspectives are important, especially if you are a business owner operating alone. Seeking advice and being challenged can be helpful if it’s coming from the right person. Consulting with trusted advisors can help reach a decision you are confident will achieve the desired result in your business. By consulting with your advisors, you’re able to tap into deep knowledge bases when it comes to finance, tax, legal and other issues that arise on a regular basis.
Don’t avoid it
Stress is a common result of avoiding decisions and stress can lead to a myriad of health issues. So, in addition to keeping your business moving forward, your health could start to be compromised. If you tackle the issue, make difficult decisions, and move forward, you can open yourself up to becoming a better business owner. The weight of decisions that are lingering and have yet to be made can be a burden. If your brain isn’t bogged down with an upcoming decision, that leaves room for innovative ideas and more creativity. Make the decision and move on! Give yourself the ability to be the visionary for your company.
Owning a business isn’t easy and when you have others involved, like employees, the impact of your decisions can be significant. Business as usual may not be what’s best for your business. Sometimes changes are needed and, as the business owner, you are responsible for making those decisions. We hope after today’s episode you are equipped to more easily tackle decision-making in business. The main takeaway today is, make the decision even if it’s difficult or uncomfortable. Get the information you need, consult experts, weigh your options, then make the decision, track progress, learn what you can and move on!
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