Are you looking to make the move from employment to entrepreneurship? Are you starting to lay down the foundations of your new business? Or perhaps you already run a start-up company and plan to take it to the next level?
Regardless of which category you belong to, they all involve making decisions. Sometimes, these business decisions are nerve-wracking. But like it or not, you have to go through tough decision-making.
Whether you’re an employee putting up a small business or a budding entrepreneur dreaming of making it big, we invite you to continue reading below.
Let us look at some of the most difficult types of business decisions.
Business Decisions: The Toughest Ones
People have different reasons for becoming entrepreneurs. These reasons and motivations translate to some of the toughest business decisions. Here are six that you may have to go through on your road to success:
1. Quitting Your Day Job
For someone who is seriously considering the move to entrepreneurship, quitting your day job is one of the toughest hurdles. Leaving your main source of income is a risk. It means leaving your comfort zone and entering the door of the unknown.
The key to quitting your day job lies in the preparation. This means preparing yourself financially as you say goodbye to your steady paycheck.
It also entails getting the right amount of support from family and friends. It is also a challenge telling your boss and colleagues. This is very much true if you worked with the company for several years.
A good way of handling the decision is to continue with your day job while starting your small business on the side. Stay with your current company as you lay the foundations of your business. Once you feel that you are ready to go full-time with the business, that’s the time you can quit.
2. Financial Decisions
Financial decisions are usually tough in nature. These decisions involve various kinds of concerns. Sometimes, it is as simple as using professional bookkeeping.
Sometimes, it involves acquiring assets. If you are putting up a small business, you will have to decide where to get your funding. If you already have a business, you will need to make decisions involving cash flow management.
Business owners know how sensitive some financial decisions are. Hence, they opt to hire professionals who can provide additional insights. Usually, companies hire lawyers and accountants who help out in huge financial decisions.
3. Who to Hire
A growing business means profits are increasing. Expanding your operations will likely follow. In such cases, you may need to increase your manpower.
One of the toughest decisions you will have to go through in relation to expansions is knowing who to hire. Sure, you may have your own human resources team. But as the business owner, you need to leave your imprint as far as hiring new people goes.
In order to hire the right people, you need to consider some key factors. First, you need to look into the expertise of the applicants. Next, you need to weigh the value they are bringing to your company. Last but not least, you need to consider their attitude and behavior.
In addition, firing employees is also tough. It involves a lot of emotions on both parties. Whenever you fire someone, make sure to make it clear to him why you are letting him go.
4. Breaking Up with a Partner
Severing ties is another difficult decision for any entrepreneur. It is normal for business partners to disagree on certain topics. Sometimes, this clashing of minds results in innovative ideas.
However, there are instances when disagreements reach a point where they already impact the business negatively. Such conflicts take a toll on the business. They also affect the morale of your people.
When things become ugly, you may need to decide on breaking up with your business partner or associate. Yes, cutting ties with someone you work closely is emotionally draining. But don’t hesitate to do so if it involves the welfare of your business.
5. Strategic Decisions
Strategic decisions are the ones that have a long-term impact. These are the choices that will affect the profitability of your company in the future.
Some of the most common strategic decisions involve developing new products. Sometimes, it only takes that one unique product that will take your business to the next frontier.
Another example of a strategic decision is forging alliances with other companies. This usually takes place during joint ventures.
Such a scenario can sometimes become tricky. When the joint venture fails to meet its goals and targets, it may leave the business at risk of shutting down.
Considering the sensitivity of the matter, hiring a lawyer or business consultant may yield dividends.
6. Operational Decisions
Operational decisions go beyond the day-to-day operations of your business. Apart from administrative tasks, you also need to decide on the right suppliers.
You also need to decide on the distribution channels for your products. Your marketing strategy and how you will implement it is also an operational decision. Regardless of how big or small they are, these decisions will affect your sales revenue.
These decisions will impact your operational costs, as well as your bottom line.
Tips for Making Better Decisions
Here are some tips that will help in making business decisions a lot easier:
- Break down your decisions into small steps. For financial concerns, determine how much the decision will cost you and how much you will get in return.
- Come up with a financial forecast. Include the rate of your return on investment. List down your targets.
- Assign deadlines and responsibilities for each of your projects.
- Open up to your upper management people regularly. Discuss your ideas and conduct brainstorming sessions.
Grow Your Company the Right Way
Handling difficult business decisions is doable. All you need it to have the right mindset and enough preparation.
Tough decisions are part of growth, and growing a small business entails doing things the right way. We encourage you to check our other blog posts. We provide enriching articles that guide entrepreneurs on their road to success.