Making decisions like what to eat for breakfast or what to wear can seem difficult in the moment, but these kinds of decisions don’t usually keep us up at night. Decisions concerning your business, however, carry considerably more weight.
Sure, one poor decision isn’t necessarily going to sink your company, but a series of poor decisions definitely could. Making smart decisions is key to success—and you’ll have to make a lot of them as a business owner. You should always make an effort to learn from your mistakes—but prevention is obviously preferable to damage control.
So how do you make smart business decisions? What to do isn’t always clear in any given situation, and there are no clear-cut processes you can use that will apply to every decision you have to make. With that said, here are 5 essentials that will help you make smart business decisions you can feel good about.
Businesses that adapt are the ones that survive for the long haul. Just think of some of the most iconic brands that have struggled through changes in the market. Blockbuster, anyone? Leveraging new technologies and developing new markets is a smart business decision that can help future-proof your company.
One good example of this is Marvel. In 2000, the company was on the verge of bankruptcy: $250 million in debt, and just $3 million in the bank. Instead of giving up, CEO Peter Cuneo changed the business model to licensing, spurring a new generation of films and toy production that has led to enormous growth. The company has grossed about $10,916,958,583 to date.
Making smart decisions long term involves knowing your product or service’s value and position in the market from the very beginning. One way to do this is to leverage the power of crowdfunding to bring your concept to life and test your assumptions about your potential customers.
Crowdfunding allows startups to speak directly with their target market, essentially providing market intelligence data through fundraising. Only projects that get people excited will get funded, and the process allows founders to see exactly what their audience wants and needs. The crowdfunding industry has exploded since it went mainstream around 2009. In 2015, $58.8 billion was raised via crowdfunding, while venture capital firms raised only $30 billion.
Trial and error in business is all well and good, but it’s also very helpful as a business owner to have someone you can turn to who is more experienced and has already been in your shoes. Having a mentor you can turn to who can advise you on tough decisions will save you a lot of time, energy, heartache, and potentially, money. There are many skilled people who are very giving of their time and energy to the next generation of business owners. Whether you pay for coaching or get connected through networking groups, your mentor can help you learn how to make smart decisions—and prevent you from making some dumb ones.
Some people like to surround themselves with people who aren’t as smart as they are. They like the ego boost of feeling like the smartest person in the room. The problem? If you don’t surround yourself with people who are smarter than you, you won’t learn anything.
Stagnation is a huge problem for companies big and small. Business owners need to challenge themselves, seek out new ideas, and learn as much as they can, no matter how long they’ve been in business. One of the best ways to do this is to surround yourself with people who are smarter than you. You’ll learn a lot, become smarter yourself, and make better decisions.
Trying to make decisions before the time is right is both frustrating and potentially harmful. Before you make a decision, ask yourself if now is the right time for this decision. Do you have enough information, enough resources, and enough time to make a smart and informed decision?
Timing is everything. You may be under a deadline to make a decision, or you may be better off waiting a bit. It all depends on the situation. You need to understand the timeline and make your decisions according to what that timeline dictates.
Originally published: https://socialmediaweek.org/blog/2018/05/5-essentials-for-making-smart-b...
Ryan Ayers has consulted a number of Fortune 500 companies within multiple industries including information technology and big data. After earning his MBA in 2010, Ayers also began working with start-up companies and aspiring entrepreneurs, with a keen focus on data collection and analysis.