Decision-Making For the Entrepreneur

Decisions, decisions. If you’re venturing into the world of entrepreneurship, you’ve already

made a huge one: you’ve decided to leave the security and predictability of standard employment behind. It shows that you have the capacity to take on uncertainty and face a range of unpredictable results with confidence, or at least with guts. It’s a skill you’ll need over and over again. Being able to make and commit to big decisions might be the most important fundamental skill you can develop.

I’m particularly passionate on this subject, because in my view the thing that most holds independent business people back is indecision. Decisions move businesses forward; that’s not hard to understand. What many don’t realize, however, is that no one moves forward without all kinds of decisions, including the bad ones. From studying the example of the entrepreneurs I look up to, I’ve learned that none of them got where they are by trying to make perfect decisions. They got where they are by making lots of decisions, from brilliant to regrettable and everything in between.

That’s not to understate how stressful decision-making can be. From experience, I know exactly how daunting it is. When your livelihood is in the balance, it’s pretty hard to imagine being comfortable with the idea of making a wrong move. However, almost every great entrepreneur has succeeded precisely because they would rather move in the wrong direction than stand still. Rather than trying to make perfect decisions, they used each decision’s result as a stepping stone towards their broader goals.

I’ll be the first to admit: I’ve made some business decisions that did not turn out to be the best. However, I recognize those missteps as part of the process. In the end, I’d rather have made those mistakes and ended up where I am than have allowed myself to be paralyzed. If I had, you might not be reading this.

The Decision-Making Process

From experience and the wisdom of others, I’ve learned that there is a way to get over one’s natural hesitancy and make timely, wise decisions. While nothing will guarantee the outcomes of those decisions, there is a formula that makes decision-making an easier, more informed process, regardless of what kind of business you’re in. By considering just a few key factors, you can empower yourself to make confident decisions, exactly when they need to be made.

It’s important to remember one thing: not deciding is a decision in itself. A lack of a decision is a choice, if only to maintain the status quo. For example, as I write this I’m faced with a decision regarding the price of one of my products, the webinar platform Webinar Ninja. I’m convinced I should adjust the price, but it remains to be decided by how much. The price I set will determine all kinds of things, from how much revenue we bring in, to the kinds of customers we attract, to our branding and image. I have to make a decision about this, because doing nothing is still doing something. In other words, the longer I keep the price where it is, the more I commit to the exact model I’m already using- for better or worse.

To break out of the tentative stage of a decision and fully commit, I use a three-step process:

1. Ask yourself if the decision (and its effects) would be permanent.Whichever path you choose, can you turn around if you don’t like where it leads? Is the decision reversible? Sometimes, simply planning an exit strategy in the event that things don’t work out is the best way to feel confident moving forward. Most of the time, with almost all types of decisions, you’ll find that the answer is usually yes. Prices can be adjusted. Projects can be reassigned. Different approaches can be tried and discarded if they don’t pan out.

In the case that a decision would be permanent, just make sure that it aligns with the overall mission of your business, is consistent with your business culture, and that all available information has been factored in. Accepting risk is part of the entrepreneur’s lot. Speaking of which…

2. Assess the risk. Establish “worst case” and “best case” scenarios and perform a risk/reward comparison. If the risk far outweighs the potential reward, it’s time to adjust your plans. In my price-adjustment example, I know that by raising prices I risk alienating a certain number of customers, and losing some. The potential reward in revenue, however, could allow my company to make greater strides. If the number I’m considering will price half my customers out of the service (in the worst case), I need to lower the number.

Adjust your plan, and repeatedly concoct best and worst case scenarios until you find one that feels comfortable. If you could live with the worst case, and the potential best case is a game-changer, do it. Some of this is intuition -you can’t predict everything accurately- but if you train yourself to decide things within a fairly accurate range of possibilities, you’re likely to plot a relatively safe course forward.

3. Set a deadline. This is what separates the thinkers from the doers. By setting firm deadlines and adhering to them, whether you feel completely ready or not, you shake the reticence that holds so many back. This is where it’s most important to remember that you can’t control everything. This habit is one that truly requires a person to accept the reality of risk, and grow steadily more comfortable with it.

When you’ve done your calculations, you’ve weighed the possibilities, and you’ve factored in all the known variables, it’s time to mark the calendar. Whichever move it is, you’re moving on this date, come Hell or high water. The best and most successful entrepreneurs I’ve known aren’t cavalier or overly casual, but when they’ve settled on a course of action, they move. Sometimes it goes well, sometimes it doesn’t, and in either case they respond by moving again. Make your call, set your date, and then immediately take some concrete step towards implementation, even if it’s a small one.

The most important decision you can make is the decision to make a decision. Lead yourself, and remember that after years in business, the most successful people have usually racked up a pretty significant list of regrettable moves, all of which turned out to be worth it in the long run. If you’re new to decision-making, start small. Exercise your decision-making muscles on less intimidating decisions like the font on your website or the color of your business card. Get used to making calls, and to the idea that each is just one small part of a bigger story.

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