Running a business means making decisions every day. Some are pretty easy and mundane, but others can really affect your future. Some decisions, like what to have for dinner each night, are basically impossible. We don’t know the answer.
But we do make accounting software, so we know quite a bit about businesses, and the challenges they face. From setting long-term goals to choosing the best suppliers, making the best decisions can often be a bit of a headache. You’re constantly balancing risks and opportunities while trying to stay ahead of competitors and keep customers happy.
We’ll look at practical ways you can sharpen your decision-making skills, helping you make better choices for your business.
Use data to guide you
One of the most reliable ways to improve your business decisions is by using data. Yes, gut feeling can play a part, but the truth is that data-driven decisions often lead to better outcomes.
Whether it’s sales figures, customer feedback, or market trends, data provides insights that can help you understand what’s working, what’s not and where adjustments need to be made.
For instance, let’s say you’re deciding whether to launch a new product. Instead of guessing what your customers might like, look at your sales data. What products are selling well? What are customers already asking for? It’s worth using analytics tools like Google Analytics or social media insights to track which products or services get the most attention. By basing your decisions on actual data, you reduce the risk of making expensive mistakes later on.
Financial reports are your friend!
Following on from this, financial reports are really important when it comes to making better business decisions. By regularly looking through reports such as profit and loss statements, balance sheets and cash flow statements, you can get a clearer view of your business’s financial health. This information is crucial for making informed decisions about spending, investing and growing your business.
OK, so we make accounting software so we’re obviously going to say that financial data is useful. But as an example, imagine your cash flow forecast shows your expenses are creeping up while revenue is flat. This means it’s time to reconsider certain costs or focus on boosting sales.
Similarly, a profit and loss statement might show that a particular product or service isn’t bringing in the revenue you’d hoped for, prompting you to adjust your prices or stop selling it altogether.
Write a business plan
A business plan is like a roadmap for your business – it outlines your goals, strategies and how you plan to achieve them. It’s also worth mentioning that investors or lenders will want to see one if you apply for funding.
Whether you’re just starting out or looking to grow, writing a business plan can help you stay focused and organised. It covers everything from your competition and target market to financial forecasts and marketing plans.
Referring to your original goals can help you make targeted decisions towards what you’re trying to achieve. Your business plan is not a device for predicting the future though, so you may need to be flexible if the right opportunity comes along.
Involve your team
The people you work with are likely to have their own perspective on things, so it’s useful to ask staff and colleagues for their input. Business partners can help you avoid your blind spots, and employees often have insights that you might not see, especially if they’re interacting with customers or handling day-to-day operations. They may spot inefficiencies, know of areas for improvement, or suggest new ideas you hadn’t considered.
Encourage open communication and make it a habit to consult your team before making any big decisions. By involving others, you’ll hopefully build an environment where people feel their opinions are heard. Plus, when team members feel included in the decision-making process, they’re more likely to be on board when changes happen, making it easier to move forward.
You don’t have to go along with any suggestions if they’re completely ridiculous. You’re the boss, after all.
Learn from your mistakes
No one gets everything right all the time, and that’s fine. In fact, mistakes are an important part of learning and growing. What’s important is that you take the time to reflect on your past decisions (the good, the bad and the ugly!) and learn from them. After a decision has played out, ask yourself what worked and what didn’t. Was there something you overlooked? Could you have gathered more information before making the choice?
By taking stock of your previous decisions, you’ll get a better understanding of your decision-making process and how it might be improved. You don’t need to dwell on failures but see them as valuable lessons for the future. Be nice to yourself, we’re all winging it to some extent.
Stay flexible and open to change
Business environments are always evolving, and sometimes the best thing is to be flexible and willing to adapt. The COVID-19 pandemic was a perfect example of how businesses had to quickly pivot to survive, whether that was switching to online sales, offering new services or changing marketing strategies.
Being open to change also means regularly reviewing your decisions and changing course if needed. Just because you made a decision doesn’t mean you’re stuck with it forever. We’d still be wearing that terrible bucket hat if that were the case. Regularly assess your strategies and be prepared to make adjustments if something isn’t working as expected.
Don’t rush it
When it comes to making important business decisions, try not to rush things. While some decisions need to be made quickly, others benefit from taking the time to weigh up all the options.
Give yourself the space to think things through, gather the necessary information and get plenty of feedback too.
Rushing into something or being impulsive can mean making a decision you regret later. On the other hand, taking your time helps ensure that you’ve considered all angles and are making the best possible choice for your business.
Regularly review your decisions too!
Regularly reviewing your business decisions helps you stay on track and adapt to any changes. What worked a few months ago might not be the best approach today, and by reflecting on your choices you can spot areas for improvement, avoid repeating mistakes and grab new opportunities when they arise.
It’s a chance to learn from what’s worked well and tweak what hasn’t, making sure your business keeps moving.
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