One of the biggest things holding entrepreneurs back from making bigger, better decisions for their business is anxiety over making a bad choice. Here are five things all business owners should remember when it comes time to make a business-changing decision, writes former Flying Solo editor, Kelly Exeter.
Few things cause more anxiety for business owners than making decisions. They know that poor decisions can cost money, cause stress and delay success.
If you focus too heavily on the pitfalls of poor decisions, the result can be paralysis – delaying a decision until you’re forced to make it, or not making any decision at all.
Five techniques to help you make better business decisions
It’s not reasonable to expect that every decision you ever make for your business will be a good one.
But you can tip the balance in your favour by calling on the following five techniques.
1. Use the big picture as a key filter
Imagine you’re getting ready to head out to a business event. It’s an event where you know you’ll get the opportunity to build relationships beneficial to both you and your business in the future. But you’re tired. The kids played tag team waking up last night, you had an early morning Skype call, and really, all you feel up to is some dinner and then the couch.
Should you blow off the event? Well, it depends on what your big picture is.
If your business is quite mature and you’re not trying to actively grow your operations, prioritising the need to rest and recharge – rather than continuing to push when you’re tired – might be a great decision for both the immediate term and the long term.
If your business is very new and heavily reliant on the relationships you’re building, then it might be better to push through your tiredness and head to the event.
2. Choose discomfort over resentment
We’ve all been in those situations where we’ve been asked to do something, and even though we don’t want to do it, we say yes. Purely because saying ‘no’ would make us uncomfortable in the moment.
The problem with doing this is that it always leads to resentment. Resentment of the person who asked. Resentment of the task because you never wanted to do it. Resentment of yourself for not saying no when you had the chance.
Now I will say it’s all well and good to chant ‘choose discomfort over resentment’ to yourself when someone puts you on the spot. But in reality, not too many of us can say a flat ‘no’ to someone’s face when their expectation is a ‘yes’.
You can buy yourself some time and space in these situations by saying something like: “I need to check my schedule when I get back to the office.”
Moving yourself away from needing to respond in the moment allows you to be more considered about, and more comfortable with, how you say no.
3. Beware of loss aversion
Loss aversion is a cognitive bias humans have. In terms of decision-making, it sees us focus more heavily on what we might lose from making a certain decision than what we might gain.
For example, you might be considering putting on a new staff member. Loss aversion might see you focus more heavily on what they will cost your business in salary and entitlements, rather than on the fact that they will free you to do work that generates sales higher than you’re currently achieving.
It’s always prudent to weigh up the pros and cons when making a decision. You just need to account for the fact that humans are programmed to focus more heavily on the potential losses in the cons, over the gains that can come from the pros.
4. Leverage all three of your heart, head and gut
Heart decisions are emotionally driven. Head decisions are based on data and rationale. Gut decisions bring in intuition.
There are very few (if any!) decisions that should be made using only one of these things. Most decisions should take all three into account. How do we do this? Again, it’s about awareness.
Catch yourself when you’re about to make a spur-of-the-moment decision because you’re all caught up in the emotion of something. Gently remind yourself to take a deep breath, bring some rational thought into the mix, and check if what you’re about to do ‘feels right’.
Check in with your heart and gut to see what they’re telling you when you’re caught up in spreadsheets and drowning in data, trying to weight something up.
There’s no perfect way to leverage all three of these things – but the simple act of checking in with them will help you make decisions you feel good about.
5. Get your timing right
Have you heard of decision fatigue? In short, every decision you make over a day slightly impairs your ability to make a good decision the next time. It’s why we make bad decisions about what to eat when the 3pm slump hits us at our desks. And why you’re more likely to fire off an irrationally angry response via email in the afternoon than in the morning. Or drop hundreds of dollars buying the domains for that cool new business idea you had at midnight.
Bottom line – be conscious of making decisions when you’re tired. You should also be aware of making decisions when you’re highly emotional. Where possible, always delay the final decision to a time when you’re well-rested and calm.
The success of a business is seldom reliant on the outcome of a single decision. Instead, success is the result of hundreds of decisions made over years.
Setting yourself up to make good decisions more often means you will spend less time and energy managing the fallout of poor choices, and more on taking your business forward.
Source: Flying Solo March 2022
This article by Kelly Exeter is reproduced with the permission of Flying Solo - Australia's micro business community. Find out more and join over 100K others https://www.flyingsolo.com.au/join.