Decision making is the name of the game when you’re an entrepreneur.
Every day entrepreneurs across the globe are tasked with making decisions that could make or break the future of their business, reputation and livelihood. A good entrepreneur has to be an excellent decision-maker. That doesn’t mean they can’t make mistakes from time to time, but they need to be able to spot potentially hazardous ideas when they see them.
In this article, we’ll cover why good decision-making is so important for finding success as an entrepreneur and how you can go about improving yours.
Why it’s important
Entrepreneurs deal in good ideas.
Yes, they run businesses that sell commodities, offer services and provide real estate — but ultimately a good entrepreneur is in the business of selling ideas. Every day they need to convince investors, staff and consumers to come along on a journey with them. While their team does the heavy lifting, entrepreneurs are focused on the big picture and all the risks that come with it.
However, there are other reasons that decision-making is so crucial to effective entrepreneurship.
The risk is greater
Bad decisions can be much more damaging to entrepreneurs, particularly those just starting out.
A small-to-medium entrepreneur is always living on the edge. For some, that’s part of what’s fun about the job (and what makes the reward even sweeter). But when you live and work with this mindset, the big mistakes you make mean a whole lot more.
More often than not, entrepreneurs are staring at two options before them. One pushes the business forward to new heights, while the other could potentially lead it down a dark path that sometimes ends in closure. Of course, they’re not labeled in this way and how the idea plays out ultimately lies on you. However, when you’re building something grand, even one small mistake can bring the house of cards tumbling down.
Bad decisions don’t just lead to a financial downturn or lost progress. They lead to a loss of reputation. An entrepreneur’s reputation is everything. It’s what gets them a better deal on exclusive products, earns calls from prime investors and gets you those crucial marketing slots.
More people are relying on (and questioning) your decisions
When you progress as an entrepreneur to the point where you have your own business your decisions no longer just affect your own life and future, but those of many others.
When you make the decisions to pursue a new market, significantly up your advertising spend or more into a larger office downtown you’re not just playing with your own future of that of a back-room business. You’re playing with people’s lives.
The lives of your employees, freelancers who rely on you for regular work every year and the investors who have provided the funding to launch your operations. One wrong decision can see funds and business dry up, and before long you’re letting people go before being dragged into meetings with furious investors.
If you want to spend less time apologizing for and explaining your decisions, you better learn how to make ones that yield more positive results.
How to improve it
Now that we understand common dilemmas entrepreneurs face and why being a good decision maker is so crucial to them, let’s look at some common ways to improve the skills behind it.
Games and tests
Brain training has been a popular industry for years, as people try and find ways to improve their thinking, outlook and decision making in their personal and professional lives.
If you’re worried about your decision-making abilities, consider using your free time to sharpen them up. That doesn’t mean you have to spend your evenings buried in a textbook though.
Classic games have long been a fantastic way of improving cognitive abilities and preparing professionals for the challenges and decisions facing them in the world of work. From chess to solitaire, medical experts focused on the abilities of the mind have eulogized about the power of these games. Thanks to the internet, there are easy ways to play online solitaire games or virtual chess without the need for real-life opponents to test your wits against.
How do these games help? They force you to consider multiple scenarios and outcomes. If you’re constantly juggling five or six avenues one decision could take you down, you start to apply that thinking in real life. Business decisions become similar to considerations about whether or not you should take that pawn or block off the queen.
Do your research
Research is everything in business.
Whether it’s a buying decision or a choice of the market to target, understanding the present playing field is crucial to good decision making.
To improve your decision making you should infuse everything you do with a solid amount of research. Every product you choose to sell, every digital tool you purchase for your team, every audience you try and target — they all need to be based on solid research conducted by yourself and people you work closely with.
How does the price align with your budget and is there a long term future for this investment? These are the kinds of questions you need to answer in your research before getting your card out.
Say you were opening an ecommerce store, for example. You wouldn’t bank the future of your business on a product you didn’t understand or try selling through a platform you hadn’t taken the time to learn yet.
This kind of research can be the difference between a good investment and a very costly one.
Trust outside opinions
Even the best and brightest leaders need people to help them make the big decisions.
Whether it’s a trusted confidant or an appointed advisor, it’s great to get an outside opinion from someone you trust. Being wrapped up in your own decision making and putting immense pressure on yourself will only lead to you making a big mistake down the line. Sometimes you need the wise voice of someone you trust (or even just someone completely outside of your world) to help clear the fog and make your choice more obvious.
From friends to colleagues to mentors — we all need someone who can make decisions feel that little bit smaller. Getting into the habit of asking for advice and clarifying your choices with someone is a great way to make sure you’re never rushing into something.
You’re never going to make the right decision 100% of the time. If you did, you probably wouldn’t make a good entrepreneur. A good entrepreneur makes mistakes and learns from them. Their mistakes guide them towards that one great idea that breaks them into the big time.
Rather than trying to be perfect, it’s more important and useful to recognize the weight of your decisions and look for new ways to develop as a professional and person.