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How to use the best types of entrepreneurial decision-making

Entrepreneurial decision making - deciding which was to go
Photo by AbsolutVision on Unsplash

As a small business owner and entrepreneur you won’t last long without developing leadership skills and concentrating on entrepreneurial decision making as a core skill. It will be very difficult for you to run your business without making regular decisions to solve your problems.

There is a structured 5-step decision-making system, which can help entrepreneurs make better decisions:

5 step decision-making process for entrepreneurs

Your entrepreneurial decision-making skills can be improved with a system or a process, which will help guide you when you come to make your next important decision within your business.

There are numerous types of decision-making in entrepreneurship, but this simple 5-step system for decision-making provides a structured process for all entrepreneurs.

  1. Acknowledge you have a problem

  2. Review and understand your problem

  3. Identify realistic and achievable solutions

  4. Review and rate your solutions (choosing the best solution)

  5. Try your chosen solution

You can use this system to analyse, review and overcome your big or small business problems. Using entrepreneur decision making skills can help you beat the obstacles between your current situation and the new situation.

1. Acknowledge you have a problem

Whenever a challenge or problem presents itself you should take the time to recognise and acknowledge you have an issue. Then try to find a solution to resolve your problem as quickly as possible.

How to accurately define your entrepreneurial problem

Acknowledging your problem needs you to:

  1. Understand consequences of your situation

  2. Consequences of making no changes

  3. Most likely result if you were to make a change

Understanding how your problems started is also key to this first step.

For example, if your marketing activities consist of writing blogs posts and social media messages, but you’re finding it difficult to meet your publishing schedule. Something will have to change, as this would be a problem if your lack of consistency continued.

2. Review and understand your problem

When you have acknowledged all of your current problems you can then take a deeper review of the problems and how the issues may affect your business from this point.

Continuing the blog posts example. One of your freelance writers quit. Therefore, affecting your publishing schedule. Showing there could be multiple interrelated issues delaying your objectives and affecting your business.

When you take note of your problems. Be sure to review how your business will operate in the future based on the current challenges and understand if your future objectives or targets will be affected by the ongoing challenges.

List each of the problems in order of their affect on your business objectives. So, you have a list of issues in order of importance and urgency.

3. Identify realistic and achievable solutions

After reviewing your important and urgent issues list. You can start mind mapping possible solutions. Start with the most urgent issues first.

You should know the reasons for each of your problems from Step 1 and try to resolve the factors causing your problems. It’s better to remove the reasons for your obstacles, so your solutions are not temporary.

4. Review and rate your solutions (choosing the best solution)

Each of your mind mapped solutions needs to be reviewed and analysed, so you can choose the best solution for each of your problems. Using a rating system allows you to assess each of your options and select the best option for each problem, root cause and situation.

5. Try your chosen solution

When you have chosen the highest ranking solution for your each problem you need to attempt each solution until you have a result. This will help you confirm your problems are resolved or otherwise.

If the solution does not resolve the problems, you should review and start with another solution until you have a removed the problem from your list.

How can you have confidence in your decision-making?

The 5-step decision-making process will help you organise your thoughts to overcome your entrepreneurial challenges. However, you might still need help to improve your confidence in your decision-making or ability to believe in your own solutions to your problems.

The [way to success] (link: internal success pillar) is to have some confidence in your decisions. As an entrepreneur you will need to take risks and make decisions without full information.

Using research on building confidence of surgical trainees demonstrates [internal factors] (link: internal motivation article link) are likely to give you more confidence:

1. Become a lifelong learner (i.e. your underlying knowledge)

Becoming confident in your ability to make decisions and also confident in the decisions you make are two very different things. Both require you to gain knowledge by continually learning more about your business, industry or common problems.

There's always something that you can learn and something you can teach.” - Roman Reigns, American wrestler

You must continue learning throughout your business life. The more time you take to learn, the more you will understand there are things that you don’t know. There is always something else to know and understand.

A quick approach to continual learning is to always ask yourself ‘why’ when you meet a business roadblock. This can help you get to the root cause of any problem. Your research to find a solution will keep you growing and developing.

2. Trust yourself to become a decision maker (i.e. your self-perception)

Making any decision will need you to be confident in your decisions. Trusting yourself will help you to find an answer or a solution to your problems. You may not always make the most efficient or effective solution 100% of the time, but you need to give yourself the space to find the right answer.

Preparation and knowledge of your key business metrics will help you to see potential business issues before they become serious problems.

If you don’t have confidence in your ability to make business decisions, your business will not last long and your entrepreneurial journey will be over sooner than you would like.

3. Practise make perfect (i.e. your personal experiences)

Taking the time to plan your next action will help you track your progress and keep moving towards an objective or goal. This can then help you review your previous actions and see if there were any improvements you could have made on your past decisions and actions.

This repetition of plan, practise and review helps you to solidify the learning and decision-making. If you can use the 5-step decision making process and review this will help you see what's working and improve decision making.

It’s great to have long-term objectives, but you have to work in the present. You should use your planning time to keep moving forward.

4. Find good people and keep them close (i.e. your supportive environment)

Running a business is tough. There are numerous challenges that will need a solution. Learning to choosing how your business navigates the world can be difficult.

Burn out is a real thing; the constant pressure to lead and do the right thing can be draining for many entrepreneurs.

That’s why you need to lighten your load and help yourself make decisions. Emotional and practical business support can help. Learn to delegate and rely on employees, friends, family, mentors, other business owners, entrepreneurial groups, professional counselling and your business network.

A few remaining thoughts on how to improve your decision making

The excitement of a new business or side-hustle may cause you to forget your project needs you to make important decisions.

Unfortunately, dealing with unforeseen events or circumstances is a regular part of entrepreneurship. Some problems may be larger than others, but gathering your thoughts in a structured manner will help you review your problems, plan the next steps and resolve each challenge as they appear.

You will also need others to help get you to where you want to go. Start cultivating your personal support and business network. So, there is always someone to help when you need encouragement or talk through our next business challenge.

Good luck!

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