You’re a small business owner staring down a big decision that could make or break your company. As a leader, you have to make the choices, so how do you ensure you’re making the right call?
There are other ways to approach this rather than just trusting your gut. There are a number of different elements in successful business decision making, including input from trusted team members, an understanding of proven business management frameworks, and focus on your strategic vision.
In this article, we’ll explore the decision making process to help you learn how to make better choices and confidently move your business forward.
The importance of strategic decision making for small businesses
As a small business owner, the decisions you make have a huge impact on your company’s success or failure. According to research, the quality of a business’s decision making process accounts for a significant percentage of its performance. Making strategic decisions in a systematic way can help set your business up for long term growth.
Many small business owners rely on intuition alone, but this can lead to poor choices that are hard to undo. While instinct has value, it should be balanced with logical thinking. Do research and planning before taking action, and think through how each option may affect your business’s management and operations down the road.
Making better choices requires discipline and practice. Start small by applying a decision making process to daily problems, then work your way up to big, complex decisions. Learn from both good and bad outcomes to continue improving. With time, strategic thinking can become second nature, allowing you to confidently navigate the challenges of running a small business.
How to create an effective decision-making process
Here’s a brief overview of the steps that go into a solid decision making process.
- Gather input from your team members. Their insights and experiences can help identify factors you may have missed.
- A decision matrix can help evaluate the pros and cons of each choice. This helps create a well-informed decision, rather than one based primarily on intuition.
- Consider how each option aligns with your key business priorities and core values.
- If it’s a tough call, sleep on it. Our brains continue processing information overnight, and the best path forward often becomes clear after a good night’s rest.
- Explaining your rationale to those impacted builds understanding and support. Be open to feedback in case any concerns were overlooked.
Methods that help small business owners make better decisions
Using strategic tools can help improve your decision making process and lead to better outcomes.
Build a decision matrix
A decision matrix is a simple chart that helps you evaluate your options based on weighted factors that are important to you.
List your options down the left side and factors across the top, like cost, time to implement, and impact on customers. Give each factor a weight from 1 to 5, with 5 being most important. Then score each option for each factor, from 1 to 5.
Multiply the scores by the weights and add up the totals. The option with the highest score is likely the best choice. This helps you make strategic decisions based on objective criteria.
List the pros and cons
For less complex decisions, a basic pros and cons list can work well. Write down all the positives and negatives of each option. Look for the option with the most compelling pros and fewest major cons. Focus on pros and cons that impact your key priorities, like improving operational efficiency, reducing costs, and boosting revenue.
Get input from your team
Your team members have valuable insight into how each choice may affect operations or customers. Ask for their input on the pros and cons of each option. They may identify risks or opportunities you haven’t considered. Two heads are better than one, and in business management, multiple perspectives lead to stronger decisions.
By evaluating options objectively and strategically, you can avoid regretting your decisions and feel confident you are maximizing opportunities for success.
Getting buy-in from team members on key decisions
Getting input from your team members and managers before making big decisions is key. Making decisions as a team leads to greater buy-in and better outcomes.
Explain the decision-making process
It’s important to be transparent with your team members about how strategic decisions are made. Explain the factors that go into your decision making process, whether it’s considering pros and cons, consulting experts, or using a decision matrix to evaluate options. Sharing how you create a decision helps build trust in your leadership and the direction of the company.
Get input and feedback
Ask open-ended questions to gather feedback, concerns and suggestions. Their perspectives can help identify potential issues you may have overlooked. Even if you don’t adopt their ideas, team members will appreciate the opportunity to voice their opinion. While the final decision is still the business owner’s to make, gathering input makes team members feel valued and invested in the outcome.
Address objections and concerns
Not all team members will agree with every decision. Address any objections directly and openly. Explain your rationale again and how their concerns were considered. Compromise when you can, and stand firm when you must. Your team will respect your willingness to have a constructive conversation.
Evaluating the pros and cons of business decisions
As a small business owner, the choices you make can have a huge impact on your company’s success or failure. That’s why carefully evaluating the pros and cons of each option is so critical.
Consider both short and long term impacts
You need to balance both short-term and long-term priorities. Evaluate how each option will impact your business in the next few months as well as years down the road. Some choices may have immediate benefits but limited potential for growth. The option that aligns with your strategic vision will put you in the best position for sustained success.
Making the final call
After gathering input and evaluating the pros and cons thoroughly, you need to make a final decision. Go with the option that has the strongest advantages and limited disadvantages. Have confidence in yourself as a leader to make the strategic decisions that will benefit your business in the long run. While there are always risks, trust that you’ve done your due diligence. If needed, you can also re-evaluate your choice and make changes to improve it over time.
Make the decisions that lead to small business success
The decision making process may not always be easy, but by evaluating options objectively and logically, you’ll make the best choice for your small business. Following a systematic approach and learning from experience, small business owners can make choices that move their companies in the right direction. Strategic decision making is a skill that takes constant work to develop but pays off through business growth and success.
