12 Steps to Making Better Decisions as an Entrepreneur
Here is a stat you should be mindful of, 90% of startups fail due to poor business decision-making. These decisions are usually centred around revenue, product development and market threads.
As an entrepreneur, you will be constantly confronted with hard business decisions like changing your objectives, twerking a product to fit the market better, taking opportunities at specific risks, firing employees and funding issues.
To improve your chances of business success, you must learn from experienced entrepreneurs and understand decision architecture, psychology, risk assessment, and strategic foresight.
We’ve developed a 12-step framework to make These would help you make better decisions whenever, wherever.
#1. Gather Relevant Information
When making important decisions, the first step is gathering relevant information regarding the decisions.
You can do this by conducting thorough research, understanding customers’ needs, analysing competitors, evaluating internal capabilities, collecting qualitative and quantitative data, considering external factors, and assessing potential risks essential to making a well-informed decision.
Weigh the pros and cons of these facts and ensure that through gathering pertinent data and insights, entrepreneurs can make informed, data-driven decisions aligned with their business objectives.
It is crucial to avoid making assumptions or relying on incomplete information to increase the chances of success and reduce the risk of costly errors. Remember, informed decisions are more likely to lead to positive outcomes.
#2. Define Clear Goals
Clear goals are crucial for success as an entrepreneur because they provide direction and purpose. These objectives help with decision-making, resource allocation, and measuring progress.
Entrepreneurs with well-defined goals can adapt to the changing business environment while keeping their vision in focus.
Clear goals also help align the team, promoting collaboration and motivation toward achieving shared objectives. By making decisions that align with these goals, entrepreneurs increase their chances of achieving long-term success.
#3. Consider Short and Long-Term Impact
Savvy entrepreneurs consider both the short-term and long-term effects of their choices. They focus on decisions that promote overall expansion and resilience, finding an equilibrium between immediate benefits and enduring triumph.
They foster sustainable progress and prevent unpredictability by anticipating potential risks and outcomes.
Entrepreneurs should prioritise building trust and strong relationships with customers, employees, and investors. Ethical decision-making and social responsibility enhance reputation and integrity—adaptation to market changes and avoiding short-sighted decisions position a business for success.
Successful entrepreneurs are driven by leaving a lasting legacy that benefits their business, industry, community, and society. Considering both short and long-term impacts, a resilient and forward-thinking approach ensures longevity and a meaningful legacy.
#4. Evaluate Risks and Rewards
Entrepreneurship requires a thoughtful and analytical approach to assess the risks and rewards of every decision.
Successful entrepreneurs prioritise investments and initiatives that offer a favourable balance of potential rewards over risks, enhancing the resilience of their businesses and maximising the return on their efforts.
By evaluating risks and rewards, entrepreneurs can make bold moves while maintaining a reasonable level of risk exposure and adapting to new challenges and opportunities as they arise.
This approach builds confidence and conviction in entrepreneurs’ decision-making, guiding them toward choices that align with their vision, goals, and appetite for risk.
#5. Consult with Experts
Successful entrepreneurship involves seeking guidance from experts who have relevant knowledge and experience.
Recognising that no person has all the answers is essential, and collective wisdom can greatly enhance decision-making and business success.
By consulting with mentors, advisors, and experts, entrepreneurs can benefit from diverse perspectives, insights, and experiences gained over time. Accelerating the learning curve, minimising risks and challenging assumptions can be beneficial.
Engaging with experts also fosters valuable relationships and expands an entrepreneur’s network. Entrepreneurs can effectively implement their choices with increased confidence and clarity in decision-making.
Receiving customised guidance based on specific challenges and opportunities demonstrates a growth mindset and a willingness to improve continuously. Consulting with experts is a strategic approach that reflects an entrepreneur’s commitment to making informed choices for business success.
#6. Trust Intuition and Gut Feeling
Trusting intuition and gut feeling is a vital aspect of entrepreneurial decision-making. Successful entrepreneurs recognise the importance of data-driven analysis while relying on their inner sense and accumulated experience to make sound and effective decisions.
Entrepreneurs’ gut feelings stem from their subconscious processing of vast information and intuitive understanding of market dynamics, customer behaviours, and industry trends.
They can leverage intuition to make contextually aligned and appropriate choices, supplement data-driven analysis, mitigate risks, and develop creative and innovative solutions.
#7. Avoid Analysis Paralysis
As an entrepreneur, balancing thorough analysis and decisive action is crucial. The most successful entrepreneurs prioritise practical decision-making and value agility, understanding that taking action at the right time can lead to better outcomes than delaying a decision.
They establish benchmarks for decision-making and concentrate on refining and advancing their strategies based on real-world feedback.
By avoiding analysis paralysis, entrepreneurs can keep up their momentum, seize opportunities, and consistently move forward with their projects and initiatives.
#8. Prioritise and Delegate
Entrepreneurs must prioritise decisions that align with their business objectives and overall strategy. To focus on high-value activities, delegating decision-making to team members with expertise in that area is necessary.
This approach not only spreads decision-making responsibilities but also fosters collaboration, enhances morale, and improves skills.
By empowering the team to execute, the business can become more adaptable and competitive, driving growth, innovation, and long-term success. The “Prioritise and Delegate” approach is essential for entrepreneurs to achieve their goals.
#9. Learn from Mistakes
A crucial principle for successful entrepreneurs is to “Learn from Mistakes”. This mindset demonstrates resilience, persistence, and adaptability and acknowledges that lessons can be learned even when unplanned.
Instead of being deterred by failure, entrepreneurs use it to improve their processes, products, and services and refine their decision-making in light of evolving circumstances.
By cultivating a continuous learning and innovation culture, entrepreneurs encourage their team members to take calculated risks and embrace creative thinking.
Analysing mistakes also hone problem-solving skills and enhances decision quality, leading to sustained growth and long-term success.
Ultimately, learning from mistakes is an investment in building adaptability, humility, and a strong foundation for success in the dynamic world of entrepreneurship.
#10. Stay Flexible
Entrepreneurs must have a flexible mindset to thrive in the modern business landscape. They must be willing to adapt to change and adjust their plans as needed to navigate uncertainties and capitalise on emerging trends.
This flexibility empowers entrepreneurs to seize opportunities, stay relevant, and foster innovation.
Prioritising flexibility also promotes a culture of organisational agility, ultimately bolstering the resilience of entrepreneurs and their ventures. Overall, being adaptable is crucial for long-term success in the business world.
#11. Consider Ethical and Moral Implications
Successful entrepreneurs prioritise making ethical and moral decisions that benefit everyone affected by their business.
They strive to balance their financial goals and social responsibility by considering the needs of their employees, customers, and communities.
Making ethical choices helps entrepreneurs build a reputation for integrity, enhance their brand, and minimise legal and reputational risks.
Prioritising ethics sets successful entrepreneurs apart, promotes social initiatives, and encourages ethical behaviour throughout their organisations. By prioritising ethics, entrepreneurs establish a solid foundation for sustainable and principled business growth.
#12. Reflect and Review
Many successful entrepreneurs take time to reflect on their past decisions to improve their decision-making abilities.
This ongoing process of introspection and forward-thinking creates a culture of constant learning and accountability, which leads to long-term growth and success.
By adopting a “Reflect and Review” approach, entrepreneurs can make informed adjustments to their decision-making strategies, ensuring that their choices align with their evolving business goals.
Successful entrepreneurs can navigate complex decisions with strategy, intuition, analysis, and adaptability. They prioritise ethical considerations, stay flexible, and reflect on outcomes to embrace a holistic approach.
The art of decision-making is an ongoing refinement that parallels the entrepreneurship journey. These entrepreneurs craft their narratives through choices that define their businesses and legacies.
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January 9, 2024