Making the Right Decisions for your Business
Running a business is all about making decisions. Every day you will need to choose between different options, some on a small scale like the color of your carpeting, others on a far more significant scale, like whether to open a new branch or expand your product range. If it’s your business, the buck truly does stop with you; everything is, in the end, your responsibility. This can be a wonderful, liberating experience for some entrepreneurs, but a burden for others. How do you know whether you are making the right choices, and doing the best thing to help your business prosper?
Knowledge is power
This is decision making 101: you have to be sure of the facts before you can make come to any reasonable conclusions. In some cases, the facts are straightforward enough to obtain and verify. If you need a new printer for the office, you make a list of all the functionality you require, set a budget and see what is available that fits these criteria. For some decisions, there are multiple streams of information that all need bringing together before you can make an informed decision. If you are reviewing your current supplier as part of a routine reassessment of value for money in your business, there is more to be considered than a simple cost comparison between existing and potential suppliers. The cost will certainly come into it, but you also need to be gathering information on:
- Quality – how does the potential supplier compare in terms of the quality of its products to your existing supplier?
- Logistics – how quickly can the potential supplier deliver and collect products, compared to the existing supplier?
- IT systems – how would the new system tie in with your IT? How much expense would be involved in upgrading or replacing existing systems? How effectively would the new IT systems integrate with yours, and would they give you the same amount of information, less, or more than the existing supplier? How robust and user-friendly is their IT component?
- Added value – what does each supplier offer you that is of value beyond the basic requirements of your relationship? There are many things that could come under this umbrella, from having additional functionality for monitoring orders to providing a dedicated customer service representative for you to liaise with. You will need to evaluate each added value element to be certain of exactly what, if any, advantage each has.
- Lead times, faulty goods replacement and stock returns policies; sale or return terms, order quantities, and priority client ratings (where more profitable clients of the supplier receive better terms and have priority when there is any problem with the supply chain).
With so many facts to obtain and verify, added to this, the process of comparing two services that have to be credited on different advantages and disadvantages, it’s clear that making a choice won’t be easy. Ensuring you chose the best one for the business is not going to be made over one lunch break.
Making best use of advice
This is where you can distinguish yourself from less able bosses, by listening to the advice of those who have insight and expert knowledge of the subject at hand. A manager who is perhaps short-sighted in terms of needing to improve will always use their own judgment without consulting with anyone else, or if they do consult, they may still go with their own opinions. A manager who perhaps less confidence in their own abilities may continually seek the opinions of others, feeling they can divert attention from themselves if things don’t work out well. Between these two opposites is the position a good leader will be in terms of management. It is important to listen to advice and take it on board, but also have the confidence to make decisions based on the evidence, advice, and ultimately their own beliefs.
Being honest about your abilities
Pretending that you have all the tools you need to make decisions when you lack some knowledge or skill in a crucial area is not advised. Confident managers are happy to be open about any lack of knowledge or expertise they have and will seek out the best places to find the wisdom they seek. Taking advice on board at times could make all the difference to your company, particularly if it involves a part of the marketing process that you are perhaps not 100 percent familiar with. If you are managing the business you should not expect yourself to handle, manage and oversee every part of the process, as there may be people with a more specialized skillset that can be used to your advantage. If you are running a small business that sells a niche product, you will have a quality product selling to a certain clientele, which you will do so through marketing strategies, packaging, and your website. It is vital to give every part of the process the appropriate amount of time needed. An easy mistake to make to not recognize the importance of every single stage of the journey your product takes. If you’re not an expert in packaging, learn more here about the subject and listen to the advice of people who have made packaging their life’s work. Don’t underestimate the significance of any aspect of your business simply because it’s not something you would include in your skillset.
One of your most important roles as the boss or business owner is to make the best decisions you can for the good of your company. It’s not always easy, but it’s essential to be able to choose wisely when you need to. Poor decisions and being indecisive will damage your business and lose you money, so being attentive and giving your full focus to every issue will limit unnecessary costs and operating problems. You don’t need to be the best at everything or know the most about all the parts of your business, but you do need to know how to make the right decisions.