subject: How to Make Better Business Decisions that Will Save You Time & Money [print this page] How to Make Better Business Decisions that Will Save You Time & Money
Making good business decisions is a valuable skill that can be learned and applied throughout your life. On the other hand, a bad business decisions can affect and ruin you, your employees and even your business permanently. In fact, bad business decisions are one of the leading causes of total company failure. Bad decisions are often made when we become emotionally caught up in a situation or we simply lack the patience required to make the smart decision. Good business decisions require that you follow these major steps; determine the right method, know and understand your options, gather information, and understand the consequences. If you learn to always follow these steps as you work through the decision making process, you will likely become a very good decision maker throughout your life.
Step #1 Determine the Right Method: There are 4 common methods that are used in the decision making process; command, consult, vote and consensus. Each comes with an increasing degree of participant involvement and an increased commitment level. However, more participant involvement also decreases the decision making efficiency. If you will take the time to learn and understand these 4 methods of decision making and apply them accordingly, you will be on the way to becoming a very good decision maker.
Command: The person in charge always makes the final decision and the decision making process is often made very quickly without much thought. This Process involves only the person in charge leaving all others to deal with the choice whether they like it or not. This is a good way to make a decision if others are not affected by your choice and the potential consequences are minor.
Consult: The decision maker gathers information and opinions from others to help him/her make the final decision. This involves more people and resources, but the final decision is still made by the person in charge. This is a more thought out and calculated decision making process and is a great way to make a decision as long as others are not seriously affected. Remember that others may not agree with your decision, so make sure you know when to use this process.
Vote: Members of the group offer their opinion by voting for their choice to determine the final decision based on popular choice. This is a great way to gather everyone's opinion to help you make a quick decision that satisfies the majority of the group. However, this will likely not satisfy everyone, so if you are looking for a total group agreement before a final decision is made; consensus is the right choice for you.
Consensus: Everyone is involved and talks through the options until everyone agrees on a choice or collaboration of choices. A final decision is not made until everyone in the group agrees to a common choice. This is a great way to achieve business cohesiveness and group commitment, but it is usually very inefficient and can lead to delays in the decision making process.
Now that you have determined what decision making process is appropriate for your situation, move to step 2.
Step #2 Knowing and Understanding Your Options: You can create a simple list of choices with a little research and some brainstorming. This process will help you broaden your thinking and open up a whole world of options. After you have your list, create a list of pros and cons next to each option to help you narrow down your choices.
Step #3 - Gather Information: Researching your options and gathering information is one of the most important steps in making smart business decisions. Better Business decisions can often be made when accurate information and business statistics are available. If you can pull instant sales, inventory, financial, employee and other critical business reports and records related to your company, you will have a great advantage in making good business decisions. If you are unable to pull accurate business reports that help you in the decision making process, we recommend a business management Suite to help you become more efficient at running your business and give you the capabilities you need to be able to pull valuable decision making reports.
Step #4 -Understand the Consequences: With every decision there is a good or bad consequence which is why it is so important to understand the potential outcome of your decisions. You can use your pros and cons list from step 2 to help you prepare for possible outcomes. Understanding the possible outcomes of your decisions can help you be more prepared to handle any future situation that may arise.
Now that you have the tools to help you start making smarter business decisions, believe in yourself and go out and make them. Anyone can learn how to make smarter business decisions with a little practice.
