Feb 2024 Make Better Business Decisions This Year
We are 5 weeks into the new calendar year and it’s a good time to act on some important strategic decisions for your business if you haven’t already.
It might be that you are seriously thinking about hiring or removing a skilled worker, removing or adding a service, increasing charge out rates, improving a system in your business or buying an expensive piece of equipment. Whatever the important decision is, it’s always better to follow a structure to ensure you are not going to potentially cost yourself by making a wrong decision.
Here are 5 quick questions to ask yourself with any business decision:
- Is this decision aligned with my goals and vision?
- Is this decision aligned with my company values?
- Does this decision fit with my Financial Forecast and if not, how could it be adjusted to ensure it fits?
- Do I have the time and the resources to support this decision?
- What is the worst thing that can happen if it doesn’t work out? If the downside is too uncomfortable, then clearly it’s not worth the risk.
Here is a more detailed decision-making process to follow:
- Determine the problem and identify the goals to be accomplished by your decision.
- Be aware of your gut feeling. Your instant feelings on the situation are a great guide if this decision is right.
- Create 2 columns on a piece of paper – Pros and Cons. Also add some supportive or conflicting information that you have researched or are aware of.
- Where applicable – create a Financial Forecast to help see clearly what the decision could mean financially.
- Make the decision.
- Take action.
- Evaluate the decision a few days/weeks after it’s made.
Often important decisions are rushed or fear of the decision not working out can paralyse an owner. Don’t let this happen; instead be thorough in your decision-making process, like the example below.
An example: making a decision to employ someone.
When I am working with a client and they are planning to find and employ a skilled landscaper, we discuss what problem employing someone could solve. Also, who will be responsible for leading and training him or her and are they capable of leading them.
We always discuss in some detail the financial responsibility of this decision. We add the cost of a new recruit to a Financial Forecast by adding their wage and superannuation and what the increased Sales amount needs to be to cover this expense (also increased productivity will add additional sales) and view how the decision will affect the business over the next 12 months. (If the required sales are too high and indicates too big a risk, the decision will be suspended until a later day). But if it all appears favourable, we make sure that the required documents and systems are in place (e.g. Position Agreement, remuneration package, letter of employment, contract, interview questions, advertisement, induction plan, checklists, etc.).
We look at the downside of employing such a person: can the cost of their employment be absorbed comfortably, and are the benefits much larger than the downside. After all the information has been clearly analysed, If the client’s rational mind and gut feeling is in favour, the action to find someone starts.
Important strategic decisions to improve various areas of your business will always need to be made.
Don’t let fear stop you from moving your business to another level in 2024. Instead, follow a process and make decisions that will greatly help your business this year.
Have a great 2024!