Every day we make decisions, some big, but many are small. Some impact only you. Business decisions will impact you, your investors, your staff, vendors, your customers and possibly your family. Sorting through the details of your current situation, determining what resources are available, and the various options available takes time to sort. Being overwhelmed can cause procrastinating, but even procrastinating is a decision. So how do you improve the odds of making the right decision?
Many business owners go with the flow. If customers knock on the door – the door is opened despite the fact that it is not the best fit. Know your strengths and your business’s strengths. Attempting to be everything to everyone takes a lot of energy – physical emotional and financial.
Before making a decision be sure you have a clear desirable outcome. Again be intentional. Is 5% growth acceptable? Or do you want 25%? Is that sales or profit? It is easier to make decisions if you know what you want to have happen. It provides the basis of determining whether you were successful or not.
How to make the right decision
Here is a three step process –
- Does it fit within your mission? At FOCUS CPA our mission is to improve the lives of business owners through financial, accounting and tax services and information. This mission provides the energy for us to love our job. Thus any decision we make must help us meet this objective. Will it improve our customer’s lives? Will it improve the quality of services? Can it save us time so we can serve more owners? Is it something our customers need or want? The clearer the mission, the easier it will be to answer.
- Will it move you toward your vision? Our vision is to develop a team and a system that will meet the needs of our ideal customer efficiently and effectively within our values. We want to practice what we preach, be practical, provide consistent high quality of service, continually grow, respect others and enjoy life. Does this decision fit within our vision? Does it fit our values? The more defined the vision the easier it will be to answer this question.
- Is it financially feasible? Look at the decision from a financial perspective. What financial impact will it have on your customers – reduce their cost? Provide more value or increase their value? Provide another revenue stream to meet another need of our ideal customer? Increase our overhead? Fully utilize our current resources? Require new resources? Will the income exceed the associated costs? Having a financial model to run the projected income and expenses expected is a great tool.
Once the decision passes this three step process – it’s a go! The process itself can help improve the success of making the right decision.
This is a business version of an old English proverb. “Measure thrice, cut once.”
Here at FOCUS CPA, we can help create a financial model with you or provide a financial perspective on a major business decision. We do that by analyzing your current financial results to create the model, by clarifying your definition of success and working with you to see if your decision is feasibly possible.