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How To Make Better Decisions As An Entrepreneur

Barnaby

Barnaby Lashbrooke

Founder and CEO of Time etc, author of The Hard Work Myth

9 minute read

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As a business owner, you know that making decisions is key to the success of your business. Whether you’re deciding which products or services to offer, which markets to target, or how you're going to scale your company, high-quality decision-making is vital for long-term success.

However, solid decision-making is a skill that may not come naturally to many of us. A staggering 98% of business managers overlook best practices when they make decisions and, as a result, fail to meet their expected business outcomes 70% of the time.

Why Quality Decision-Making Matters for Business Success

On average, managers spend 37% of their time making decisions. Over 50% of this time, unfortunately, is spent on ineffective choices. This might not seem like a big deal until the impact of good decision-making on business goals is taken into consideration.

Here are some of the things you stand to gain from making better decisions:

Cost savings

Good decision-making requires careful analysis of all available business data, including financial records, market trends, customer feedback, and more. This analysis helps companies identify areas where they can reduce costs or increase efficiency. For example, a business may decide to invest in new technology that will automate certain processes or switch suppliers to get better prices on materials.

In addition to helping businesses save money directly, effective decision-making can also lead to indirect cost savings by improving productivity in employees and reducing waste. By analyzing data and making informed decisions about how resources should be allocated, businesses can ensure that their resources are being used effectively and efficiently. This can result in increased profits over time as well as improved customer satisfaction due to faster delivery times or better quality products.

Time savings

Business meetings can be crucial for decision-making, but about half of all the monthly meetings in businesses are estimated to be a waste of time—either directly or indirectly.

In addition to reducing the amount of time spent in meetings, better decision-making can also help businesses save time by eliminating the need for rework or revisions. Making quality decisions from the start helps ensure that employees are focused on the right tasks and ensure the best business outcomes. This can help save time in the long run by preventing costly mistakes and ensuring that projects stay on track.

Improved performance

Good decision-making isn’t only critical for controlling costs or saving time, it also helps companies unlock better performance. When company leaders and senior executives make informed decisions based on accurate data and sound reasoning, they’re more likely to identify opportunities quickly and capitalize on them. This can lead to greater innovation, increased quality, improved sales, faster growth, and more.

In addition, good decision-making helps businesses manage risks more effectively by allowing them to anticipate potential problems and take proactive measures to prevent them. This can help companies stay ahead of the competition by focusing resources on areas that have stronger potential for a greater return on investment.

Ethical and compliant operations

High-quality decision-making helps ensure that ethical considerations are taken into account when making business decisions, which is essential for maintaining trust with customers and stakeholders alike. This includes taking into account the potential legal repercussions of decisions, as well as any ethical implications.

Making sure that business leaders are aware of the consequences their decisions may have on the company can help their organization avoid costly mistakes and protect their reputations in the long run.

Improved customer satisfaction

Good decision-making also helps companies provide better customer service. By analyzing customer feedback and using it to inform decisions, businesses can ensure that their products and services meet the needs of their customers. This can lead to increased customer loyalty and improved customer satisfaction rates over time.

10 Tips For Making Better Business Decisions

Like any skill, decision-making can be improved with practice. Here are some of the best tried-and-tested tips that business leaders can use to improve decision-making in their companies.

Leave ego behind

It's easy to make decisions based purely on how you’ll be perceived. However, this won’t always lead to the best outcome. Instead, small business owners should focus on making decisions that are in the best interests of their company.

It’s important to take a step back and look at the big picture when making important decisions. This allows you to make choices based on facts rather than your opinion or personal biases. Additionally, it’s helpful to consult with trusted advisors and mentors who can offer an objective viewpoint.

By making decisions based on facts rather than their ego, entrepreneurs and small business owners can make better decisions that are more likely to lead to success for their businesses.

Push past fear

Fear of failure can be a major obstacle to making good decisions. When faced with a critical decision, fear can make you want to play it safe or stay well in your comfort zone.

It’s important to recognize that some risk is inevitable when running a business and instead focus on the outcome of making the best possible decision for your company. By taking calculated risks and making informed decisions, entrepreneurs can achieve their goals and achieve success.

Keep a positive mindset

Making decisions can be difficult and, at times, nerve-wracking. As cliché as it sounds, having a positive mindset makes a huge difference to your outlook and the choices you make.

Focus on the potential outcomes of each decision and how they could benefit your company. Having a positive attitude can help you stay motivated to keep making progress and be willing to make the right decisions that will help you get to where you need to be.

Don't take too long to make decisions

Big business decisions should not be taken lightly and can take time to consider. However, it’s important to avoid procrastination and make key decisions promptly.

Taking too long to make a decision can lead to missed opportunities or wasted resources. Make sure that you set a deadline for yourself and stick to it when making decisions. Additionally, consider using online decision-making tools to help you quickly assess potential outcomes of future decisions and make the best decision in a timely manner.

Create a decision-making framework

A decision-making framework is a structured approach that takes into account all of the relevant factors involved in the decision. It helps to identify potential risks, opportunities, and solutions, as well as provide a clear set of criteria for evaluating each option.

The framework should include an analysis of the situation, identification of key stakeholders, and consideration of their interests and perspectives. It should also include an assessment of potential risks and benefits associated with each option, as well as an evaluation of how well each option meets the criteria established by the organization.

Finally, it should provide the decision-makers with guidance on how to make a final decision based on all the evidence and information available.

Gather all relevant information

Having access to accurate and up-to-date information is essential for making high-quality decisions. This may include gathering data about potential customers and markets, researching competitors, or conducting customer surveys. Any information that can help inform the formal decision-making process should be taken into account. Additionally, it’s important to have an accurate understanding of the situation and any potential risks associated with each option.

The idea is to make informed decisions that are based on accurate data rather than assumptions or guesswork. Anecdotal evidence or opinions often lead to bad decisions.

Have a clear understanding of your business’s finances

The decisions you make will be greatly impacted by your company’s financial situation, and vice versa. Having a solid awareness of your business’s finances will ensure that you make sound decisions when it comes to investments or expanding operations.

Regularly review your financial records and track key metrics such as sales, profits, expenses, and cash flow. This will keep you informed of your business’s financial position and give you the information you need to make smart decisions.

Test potential solutions

Testing potential solutions is one of the most important steps that companies take in the decision-making process. It allows businesses to evaluate potential solutions before making a final decision, which helps to ensure that any decisions made are sound and effective.

Testing can be done through various methods, such as focus groups or A/B testing. By testing potential solutions, businesses can make more informed decisions that are tailored to the needs and preferences of customers. This can help ensure that any changes made will be successful and generate positive results for the business.

Avoid decision fatigue

One of the biggest enemies of quality decision-making is decision fatigue. Simply put, the more decisions you make throughout the day, the harder each one gets. Humans have a limited supply of mental energy each day, and even minor choices can take big hits out of our reserves.

Take a leaf out of Amazon CEO Jeff Bezos's book and schedule your high-IQ meetings, strategy planning, or most mentally taxing tasks as early as possible. This way, you can be sure you're tackling your most critical work with peak levels of mental energy and the full force of your problem-solving, analytical, or creative skills at your disposal.

Hire VAs to streamline processes and focus on what matters most

As the head of your business, you’re bound to be responsible for a lot of decisions on a daily basis. Slowly but surely, these will eat away at your time and deplete the mental energy you need to make quality decisions.

Another valuable weapon in the fight against decision fatigue is a virtual assistant (VA). Working with a virtual assistant reduces the number of low-level choices you're faced with in the form of repetitive, day-to-day admin tasks, allowing you to spend your time and energy making impactful decisions that will take your business further.

Not only that, but a virtual assistant can help you save time by taking a variety of tasks from this list off your plate. From gathering information through online research and sending out surveys to scheduling meetings efficiently and taking care of the minutes, the support of a skilled virtual assistant can make a big difference.

What's The Bottom Line?

With the right approach and information, strong decision-making can be a powerful tool for entrepreneurs and business owners to achieve their goals and strategic objectives, helping them avoid costly mistakes and maximize their chances for success.

Utilize the tactics we’ve shared in this guide to improve decision-making for you and your leadership team to help take your company to new heights.

At Time etc, our mission is to help you do more, achieve more, and earn more by matching you with the best virtual assistants for your needs. We have a wide range of experienced assistants to tackle those tedious and time-consuming tasks that are holding you back.

If you're ready to take back control of your time, speak to our expert team to get started. We’ll set you up with a dedicated professional based on your unique requirements.

Or try a skilled virtual assistant for free today!

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About the author

Barnaby
Barnaby Lashbrooke is the founder and CEO of Virtual Assistant service Time etc as well as the author of The Hard Work Myth, recently recommended by Sir Richard Branson. Barnaby is a Forbes Columnist on productivity and is also an accomplished entrepreneur, selling more than $35 million worth of services.

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