Two Important Decision Making Tools Every Business Owner Needs

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Blog | Entrepreneur | Resources | Small Business

As an entrepreneur, you are responsible for making business decisions every day, each one carrying a different level of risk. Seemingly small business decisions may not feel very significant, but over time they can dramatically impact the direction and reputation of your business, impacting your success and longevity. 

Being an informed and strategic decision-maker is a critical skill for successful entreprenuership.  

Every decision, from small to significant, has consequences, and avoiding or not making a decision is in fact a decision in and of itself, and that too will have implications. Some decisions may seem insignificant  or have effects that are barely noticeable, while other decisions may completely change the trajectory of your business. 

To make wise and thoughtful decisions, as the business owner it is your responsibility to make sure you have all the necessary information from the right sources. If your decision is based on inaccurate information, this can be detrimental to your team and business. So the first step in making every decision is ensuring that you are properly informed.

Poor decision-making can be devastating on many levels – for you personally, and also for your employees, stakeholders, customers, suppliers, overall business, and even your surrounding community! When decision making, as the business owner you must remember your personal and corporate responsibility for ensuring a thoughtful process is followed, and for the consequences that result. You will be credited with the wins, and losses of your business.

Other than seeking wise counsel from your business mentor and continually referring to your core values, you can also use some simple but effective tools when navigating decision making. 

 

Two valuable assets in the decision-making process are the “Pros and Cons Chart” and “SWOT Analysis”…

#1: Pros and Cons Chart

A “Pros and Cons Chart” is a basic tool that can help you make thoughtful, informed and wise business decisions. The “Pros and Cons” process can be used when making any decision, regardless of its complexity or level of importance.! This tool can also be used in your personal life and help bring a lot of clarity and confidence when making personal or family decisions. 

 

Don’t let the simplicity of the “Pros and Cons Chart” deter you from implementing it, as it can help you more clearly understand why one decision is better than another. The chart provides a clear picture of the advantages and disadvantages of each option you are facing, and helps to align your decisions to your core values.

 

To complete a Pros/Cons Chart, follow the steps below.  

#2: SWOT Analysis

Another important step to making informed decisions is analyzing your business’ strengths and weaknesses, and using that knowledge to guide your decisions. A useful way to assess and reflect on your business’ strengths and weaknesses is by using a “SWOT Analysis”. 

 

SWOT stands for “Strengths, Weaknesses, Opportunities, and Threats.” 

This process provides a strategic way to look at the big-picture of your business by assessing both the internal (strengths and weaknesses) and external (opportunities and threats) factors impacting your business.

Because your market and competition will be continually changing, it is advisable to complete a SWOT every 6-12 months according to business needs. This will allow you to  evaluate the business and provide the space and opportunity for you to make the changes and modifications needed to become a stronger competitor.

 

Some of Your Company’s Strengths May Include:

  • Unique Mission or Cause
  • Marketing Strategy
  • Excellent Customer Service
  • Superior Quality
  • Employee Skills or Talents
  • Company Culture
  • Financial Security (surplus of resources, capital, dependable investors and lenders, etc.)
  • Personal or Business Network
  • I.P.
  • Exclusive Partnerships Unique to Your Brand or Company
  • Physical Assets and Equipment
  • Strong Brand or Company Reputation
  • Recognizable Brand

 
Some of Your Company’s Weaknesses May Include:

  • Weak Performance in Particular Area
  • Employee Dis-satisfaction
  • High Employee Turnover
  • Poor or Negative Company Culture
  • Lack of Resources (time, staff, or funds)
  • Lack of Business Strategy
  • Unclear Goals or Values
  • Lack of Long-Term Vision
  • Poor Product Quality
  • Poor Customer Service
  • Poor Branding and Messaging
  • Weak Social Media Presence
  • Poor Physical Location
  • Poor Reputation
  • Low Barrier to Entry for New Competitors

 

Opportunities assess the areas where your business can improve or situations that you can take advantage of. This may include filling an unmet need, partnering with other businesses, capitalizing on current trends, or leveraging new technologies, you must continually be aware of potential opportunities that could expand and grow your business. 

 

Threats will help bring to light the areas of your business that must be addressed for your company’s survival to be ensured. External threats may include but are not limited to competitors gaining traction, new competition, downward economic trend, political turmoil, changes in federal or state legislation, societal trends, technology improvements that decrease the demand of your services, and labor strikes from your suppliers or vendors. 

Here is a sample SWOT chart. You can make a box like this on a piece of paper and work with your partner or team to complete it. You may want to also include your customers in the process, they will certainly bring good insight you may not have considered before. 

 

Both the Pros/Cons Chart and the SWOT Analysis are simple, yet very effective tools for every business. We encourage you to get in the habit of regularly using these in your business. 

 

If you need help starting or growing your business, check out our Business StartUp course! Through this self-paced, online course, you will identify your personal values, strengths and assets, and learn what makes a good business idea, how to conduct market research by using our simple and clear step by step market research guide, and even how to write a strong business plan by using our business planning master tool and templates. But that’s not all,  you will also learn how to create a purpose-driven company, how to maintain a healthy life/work balance, time management, goal setting, leadership skills and vital financial management tools. Don’t miss this opportunity! Start today! 

Values Audit

If you need help identifying your personal and organizational values, and learning how to have a values-driven company, check out our free Values Audit worksheet, it has helped many business owners and leadership teams, and we are sure it will help you too!

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