The more critical a decision is, the more important it is to use the right tools to make that decision. Often, business owners and those in leadership roles have a limited amount of time to make decisions, so having a process in place is critical to determining if opportunities and options are beneficial or are something that is not a good fit for the business at this time.
Some of the best tools for decision making for any business include:
- Business plan – having a detailed business plan that sets forth a roadmap for the business for the next year, three years, five years, and further helps to identify if a potential opportunity is in alignment with where you want to go. Business plans can change, but taking opportunities that are not in alignment with the plan can be costly and slow business growth, resulting in increased challenges.
- Real-time access to analytics and data – thanks to AI (Artificial Intelligence) and machine learning, many businesses use automation software and systems. This provides real-time information on all aspects of the company, including sales, productivity, processes, and even supply chain and logistics. Having accurate and timely data is critical to make the most informed decisions. Look for software and platforms that provide easy-to-read reports that feature the relevant data to make the best use of the information.
- Financial support – most business decisions have a cost, and working with an in-house our outside CPA to evaluate a decision from a financial perspective is an important step. Having an accounting professional or service that understands your business and your business plan ensures they can provide the necessary advice to understand the implications of acting or passing on the opportunity.
- Obtain feedback from trusted sources – everyone has a bias which creates a potential blind spot in decision making. Having a colleague, mentor, coach, or trusted team member to obtain feedback from can be instrumental in understanding all the potential pros and cons of the option.
- SWOT analysis – Strengths, Weaknesses, Opportunities, and Threats can be analyzed through a planning tool. This is a table that can be used to make decisions for both small and large businesses by identifying the up and downs of any decision.
There is always a subjective element to decision making. By using tools to gain an understanding of the facts, data, and options, leaders can use this information and their experiences and expertise to make informed decisions that will benefit their business.