Whether you’ve just opened your doors or you’ve been operating for years, it is up to you, the business owner, to make clear, effective decisions if your business is going to succeed. Let’s look at three questions that can make the difference between a wildly successful business and a smoldering hole in the ground.
# 1. Does it fit my business Focus?
It seems simple enough, “Does pulling the trigger on this decision fit with the overall focus of my business?” When the time comes to answer however, it may prove more challenging than first thought. Many business owners find it difficult to clearly articulate their business focus and this inability to state their focus makes it virtually impossible to use it when evaluating decisions.
To build a clear statement of your business focus, try this formula: My business [what you get paid to do] for [who pays you] [where you deliver your product / service].
For example, “My business creates and maintains beautiful landscapes for property owners in the uptown area.” This is a statement you can use to aid in decision making.
Using this focus statement…
- How would you respond to a request to maintain a lawn on the opposite end of town?
- What about an opportunity to add rain gutter installation to your list of services?
- How would you respond to a competitor going out of business and offering his equipment at bargain prices?
Knowing and being able to clearly state your business focus has the added advantage of providing clarity to your employees. If you cannot state your focus, how can your team be expected to know what you are trying to achieve?
# 2. Does it positively impact my Finances?
Of course we all want positive impact on our finances, but this can be a tricky question, especially considering the old saw that, “you have to spend money to make money.” The reality of running a business is that being able to discern when to invest and when to save is one of our most difficult challenges. Let’s look at how to ease that chore.
First, consider your budget. Is the expense planned for in the budget? If not, can you cut spending elsewhere to keep total expenses in check? If the question relates to revenue, did you forecast that revenue in your budget? Will you remain profitable if you don’t realize that revenue?
If you pass the first finance gate, next consider your cash position. Even if an expense is planned for in the budget, you may not have the cash on hand to pull the trigger today. Can you get payment terms to extend your cash position? If you extend credit to a customer, will the delay in receiving the payment put you in a tenuous cash position?
Finally, if it is a long-term investment, will it generate additional revenues sufficient to cover it’s cost? In other words, will the expense pay for itself? If it will, can you get terms from the vendor that will let you pay for the expense AFTER you’ve made the additional revenue?
# 3. Does it move me closer to my definition of Freedom?
Whether you sell hot dogs from a rolling cart or you manufacture high-end furniture in a large factory, chances are very good that you started your business to achieve one thing… freedom! Freedom from alarm clocks, angry bosses, crazy hours, et al. But the reality of being a business owner is very different for many of us.
The cool thing about freedom is that each of us get to make our own definition. My definition of freedom is, “To make work optional, and location irrelevant.” That might sound pretty good to you (and if it does you’re welcome to use it!) but you likely have one of you own. The important thing is to know what your freedom goal is and ensure that every decision you make in your business moves you one step closer to that goal.
Steve Jobs once said, “Look in the mirror and ask, ‘If today were the last day of my life, would I want to do what I am about to do today? If the answer is ‘No’ too many days in a row, something must change’.” I used to think that was easy for billionaire to say, but that way of thinking is a learned response, one we must train our mind to ask, and one we must be brave enough to answer.
Making It Real
As I am fond of saying, “Knowing is not enough. Success requires action!” So how to you use these 3 questions to simplify your decision making? Simple… PRACTICE! Here are a couple of helpful tips:
- Print out the keywords FOCUS, FINANCES, and FREEDOM and tape them to the wall, your monitor, anywhere that they can remind you to use them.
- If you don’t have a clear statement of your business focus, dedicate 30 minutes to write it down TODAY!
- If you don’t have a budget, make one! If you don’t have easy access to your financials, get it! If you need help understanding your financials, hire it!
- Make a dream board, cut our pictures, whatever it takes… set a freedom goal and make sure that every business decision moves you one step closer to that goal!
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