by Guest Author on October 24, 2013
Forbes recently reported that eight out of 10 small businesses fail for one of five reasons, including a breakdown in leadership due to poor decision making. Bad decisions can be the result of focusing on the wrong problem, not properly considering the potential impact and outcomes, poor communication and a host of other reasons.
Good decision making, on the other hand, helps lead a team and a business to success, and it is a skill that can be developed. Learn how to make smarter business decisions to help you take your business to the top.
Choose the Right Partner
Forming a business partnership without the necessary research and forethought can doom an organization. The relationship should be considered as important as the contemplation of marriage. There are numerous questions to ask, and you should take an in-depth look at who you’ll be partnering with.
You and your potential partner must trust each other, communicate well and share similar values, work habits and vision. Ideally, the skills you both bring to the table will complement each other. Investigate a potential partner thoroughly with a background check, and speak with his or her former employers and business partners.
Investigate Potential Investments
Thoroughly investigate any potential business investment, especially when considering a foreign company and those located in high-risk fraud zones. Some unscrupulous businesses may buy someone’s loyalty to make their company look better, even for just a brief period such as a meeting or a phone call. You can hire a firm to conduct an extensive company verification to minimize your risk and save valuable time and money.
And remember, investing within your industry is generally not a good idea, as a slowdown would result in your business incurring a more significant loss.
No One Knows Everything
One of the biggest errors you can make is believing you should be the sole decision maker. Smarter decisions are often made by a number of people with a variety of experiences under their belt. Assume you know less than you do, rather than more.
Chip Heath, a professor at the Stanford Graduate School of Business, told McKinsey.com about a study that investigated the decision making of a group of leaders in the previous decade. Their decisions turned out to be six times more effective when considering two options rather than just one.
Anthony Shop, managing director of Social Driver, stresses the importance of having a mentor, or preferably, a “cadre of mentors.” A relationship with someone who has already experienced growth and knows how to manage it well can help you grow your company. It also often enables the business owner to stay calm and focused during challenging times.
About the Author
Walter Lasky - Walter runs a marketing and SEO small business and reads every issue of Entrepreneur Magazine from cover to cover.