Establishing a business as an entrepreneur is an exciting endeavor to dream of. However, this can be nut cracking, you make a wrong decision, and the whole business becomes a toast, along with your amount of funds you have invested in getting your enterprise off the ground. But you know what? You are not alone.
Many business entrepreneurs with exact panic are busy searching for helpful information to help them make the right decisions. Luckily, in this article, you are about to discover tough decisions that you ought to make in order to achieve success in your business.
What is one of the first decisions an entrepreneur must make?
One of the first decisions an entrepreneur must make is to actualize the business idea in your mind. In essence, the rest of the entrepreneur’s decisions will solely depend on whether they start the business. This depends on a number of things, like the goal behind establishing that business.
Firstly, one may start a business as his/her full-income earner. Secondly, one may want to become the boss of their own after quitting your job if you have any to pursue your business dream. Thirdly, you may want to have an enterprise that involves partnerships. All that said and done, the hardest decision is to come up with the idea that you will turn into a business.
However, after making the first decision and starting a business, decisions making does not end there. Bear in mind that you will be faced with inevitable problems that require you to make decisions as a business owner in the process of running your business as you chase your vision to meet your entrepreneurial desires.
Below are some of the tough decisions that you will have to make to make so as to grow your business and make progress.
Other Decisions that are key for the business to thrive
1# Whether to keep the status quo or expand the business
Business involves taking risks, and when the risk is high, the high the profit or loss is anticipated. Therefore, the question that usually arises is whether to expand the business or remain in its current situation.
Notably, small businesses are ready to manage and pause fewer risks compared to big ones. In this consideration, it’s advisable to personally analyze the business’s daily operations for you to make an informed decision.
Again, the desire for expansion can be impregnable, and sometimes it’s potential for something exciting or new. Also, it can attract additional revenue. Therefore, whatever the situation having a decision whether to expand or not is substantial challenge entrepreneurs face.
Thus, the decision should be taken with seriousness. Consequently, it’s imperative to consider whether you will need to hire more employees, engage other partners, or even increase service or product selection to make a wise decision.
Further, consider whether you have proper systems to effectively and efficiently manage the business growth. Also, ask yourself whether you have strategies to ensure you maintain and sustain the product or service quality.
Finally, what are the economic influencers that influence the failure or success of the expanded enterprise? All these are factors that will give you indicators of whether to retain the status quo or develop.
2# Whether to surrender
Starting any business is strenuous and demanding work. Putting hard work only to reap the fruits in the future can be discouraging. The fact that there are financial constraints may make one feel like giving up.
Actually, demotivation by business outcomes can also be a factor. And so, know thoughts of giving up hit every entrepreneur. But even if there is every reason to make you give up, stays put and refuse to succumb to these hardships.
Gather the courage and keep press; you might achieve a mega success at the end of these hardships. Just like a Swedish player, Borg, you should never give up in a tournament. Instead, keep working hard till you succeed.
3# Whether to hire-in-house or Outsource
After the business is established, there will be a time when every business will demand additional employees or a stream of new skills, and it is unavoidable. So, as you make significant decisions as an entrepreneur, ask yourself whether you want to outsource or hire new personnel.
Sadly, it’s hard to get the right direction in this respect. However, there are several factors that you need to consider;
- Contractors cost versus benefit and payroll cost: if contracting an outsider has a negative financial Impact, hire in-house. Besides, if the wage bill is out of hand, consider hiring in-house personnel.
- Your business culture: note that if your firm has a specific tradition and this will influence tasks and functions. In-house hiring is preferred because the staff understand work ethics, dos, and don’ts, and ethically know what they are expected to offer.
- Job designations and roles: For example, functions in areas like sales public relations typically are better handled in-house by existing staff members. But for roles like IT, marketing and accounting are best when outsourced.
- Competitive business environment: If your business is in a very competitive industry, in-house hiring staff reduces the chances of secrets getting to the competitors. These factors will influence the decision you make as far as this decision is concerned with hiring in-house or otherwise.
4# How to set the price of a product or service
Decisions involving pricing are enormous, and every business owner is faced with this situation throughout the lifetime of the business. In fact, the price of your product or service speaks volumes on the value that you offer and indicates your position against particular competitors.
Further. The following are some of the points to consider as you determine the prices of a service or product;
5# Understand what your prospective consumers are willing to pay for your product or service
Understand what you want to charge considering the cost of production and other miscellaneous costs
Understand the quality of what you offer and how the product compares with similar products. Through that, you can be able to decide whether you can charge a premium price for higher quality or additional features on the product.
What you want to be known for. When settling on the price, check if you wish to be known for cheap, high-quality, or dependable products or services. In this respect, if your product is reliable, high-quality attaché a competitive and profitable price.
6# Decision-making process
The decision-making process is crucial in any business enterprise
Significantly, in any decision you make, you must take a direction, solve a problem and take action in the end.
Noteworthy, some decisions are small and have no impact on the business, while other decisions have a significant influence on the entire business’s running and success. For an efficient and effective decision for your business, the following are the steps to take;
7# Recognize the gap/problem
Firstly, decision- the making process begins with the existence of a particular gap or problem in the business. Alternatively, you may notice a discrepancy between what you want to achieve and the current state of the business.
After you identify the gap in your firm, then plan how to solve the problem. When planning the direction to approach, pays close note to the vision that you want to achieve. In this step, ask yourself the following questions;
- What are the fundamental desires that you have for the business?
- To what extent are you fulfilling these desires?
- What factors make you close or not close to fulfilling these desires?
- What are the most significant problems in that regard?
- Analyzing the identified problem
- After identifying the possible loopholes or problems:
- Analyze these problems thoroughly.
Find out how the problems affect the business. As you finalize the analysis, you will find a list of the possible discrepancies.
Sort them by the need and urgency that they deserve.
Still, in the analysis, you must determine their causes and how they affect the business. After that, upon realizing that the impact is intense, it indicates the problem is a risk to the business and needs to be solved.
8# Formulate possible solutions
In this particular step, you brainstorm all the possible solutions for the identified problem. Alternatively, you may decide to consider every problem you have listed in the previous and create a viable solution for each one of them.
Equally important, as you brainstorm on the solutions, also think about what are causes those problems. Think of how to eradicate the causes to ensure that the problem is solved exhaustively. Remember, the identified problem accompanies this process’s possible cause.
9# Analyze all the possible solutions
From the 3rd step of decision-making, you may have settled on several possible solutions for a particular problem. At this stage, carry out an analysis of the proposed solution to arrange possible solutions by ranking them from the best to the worst depending on the business need.
The analysis assists you in implementing decisions that will be efficient and effective in supporting your business to prosperity. As you rank the solutions, the ones ranked higher are the ones first to implement as you make your final decision.
10# Choose the best solution in your ranking for application
Now at this stage, this is the opportune time to make an accurate decision. This is the epitome of the results from this process goes decision making.
Here you settle on the best solution from your list that will combat the problem or feel the gap. Now, what will you implement as the cure to your specific problem? Here is the answer,
11# Implementation of the decision
Any decision-making process will end at the implementation stage. You can lie to yourself you have made a decision if you fail to implement it. Therefore, since you cannot solve the problem only by identifying it and defining the right solution, the only way you will have completed the job is by implementing the solution.
After implementing the decision, check whether you have achieved the desired results. You can do that by finding out if that particular solution solves the identified problem. If yes, then you have made the right decision. Advisably, engage all the stakeholders in the implementation stage to achieve the best results.
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Owning a business will often demand hard decisions for the business to thrive in the industry. As an entrepreneur, you should be aware that the above-discussed decision is just but a few of the decisions that you will face as the business grows.
Notably, each of these decisions comes with particular risks. Luckily, risk fear is an attribute many business owners don’t have. Aside, others do not allow the wrong decisions to drown their businesses. That said, it’s essential to apply the six steps discussed in this article to enable you to make decisions that will positively impact your business.
Bijay is an entrepreneur and start-up founder having more than 14 years of IT industry experience. He is the co-founder of TSInfo Technologies, a SharePoint development company.
A dedicated professional and very passionate about public speaking and also wrote thousands of technical blogs in various technologies. He also wrote a lots of blogs on entrepreneurship, investment, startup, business, manage money tips, etc.