Making big decisions comes with the job for small business owners. But no matter how many times you have to do this, it’s still daunting. Knowing if you’re making the right choice for your business can be stressful even for seasoned business professionals. It’s ideal to have a group of mentors, advisers and coaches around you when you come up against something, which can help dispel some of the uncertainty and give you confidence in your decision. But there are techniques you can use to help you gain clarity yourself.
We often have to make big decisions in our small business. We know that it can get overwhelming, so we want to share a simple analysis process we’ve been using which has proved to be a great help.
Opportunity analysis
Ask yourself these questions to help you make well-informed business decisions.
What is the opportunity?
Write down what the opportunity actually is. Don’t get into specifics about what you have to do to make it work just yet, simply state what it is.
For example – engaging a content writer to produce high quality articles for your website.
What resources does it require in the short and long term?
It’s good to break this down into two parts. What resources will be required in the short-term (i.e. 1-6 weeks) and what will you need in the long-term (i.e. the next 2-12 months)?
Write down everything that will be required of you. For example –
- Costs of engaging a writer
- Costs of engaging a web developer to build a blog
- 4 hours per week spent reviewing and signing off on content
- Desk space in your office
- Etc.
What are the pros, including revenue?
If you allocate the required resources to this opportunity, what will the positive outcomes be for you and your business? List down all the pros you can think of.
For example –
- Getting more high quality leads
- Growing your online presence
- Boosting your search engine optimisation (SEO) and visibility on Google
- Establishing brand awareness
- Showcasing your thought leadership
- Etc.
What are the cons, including costs?
If you allocate all the required resources to this opportunity, what will the negative outcomes be? List down all the potential cons.
For example –
- Upfront costs, without immediate return on investment
- Time required to proof and approve content
- Distraction from normal revenue generating work
- Etc.
Is this likely to be a productive allocation of resources now or in the short term?
Consider this question carefully, as it’s crucial. If you’re about to pour money, time, effort and other resources into this new opportunity, you want to be sure it will have good results in the near future. If it’s not likely to pay off for a few months or years, yet will require resources now, is this going to be the best thing for the business?
In some cases, it still may pay off if you have considerable medium-to-long term benefits expected.
Where possible, include data to justify your answer. For example, if you invest $2,500 into a marketing campaign, you’ll want to be quite sure that it will result in several new clients or a number of opportunities that will generate more income than your investment.
Is this likely to be a productive allocation of resources in the medium-to-long term?
Now that you’ve looked at short-term benefits, consider your potential long-term benefits. Again, try and source data to illustrate this.
If you invest $1,000 per month into content for your marketing, that’s $12,000 per year. One new client might cover that entire cost, which would make this a productive allocation of your resources, as long as your time isn’t taken away from other revenue generating activities.
What feedback or advice have my stakeholders provided?
Use this section of the process to note down any opinions or preferences of people that this decision may affect. For example, you may seek the thoughts of a business partner, your employees, or even your family members if this decision in going to affect them.
What is my decision?
By now, you should have weighed up the pros and cons, and know exactly what this is going to cost you. Write down what outcome you’ve reached. Are you going to move ahead with the opportunity, are you going to tweak it or change it, or will you park it for now?
At what future point will I review this document to calibrate what I decided with the relevant events or results that have occurred since?
Set a date or a point in the future when you’ll revisit this decision you’ve made. Use this time as a way to measure your results and note any key learnings for when you have to make future decisions like this. For example, you may note down that you didn’t invest enough money, or that you rushed into it too quickly. Whatever your learnings are, they’ll help you next time.
Strengthen your decision-making skills
Decisions need to be made in business, whether you decide to invest, hire, grow or not. Only you can make the call as a business owner. Decision-making is a muscle. Like every other muscle in the body, it needs to be flexed and strengthened so you can get good at using it. It will make life less stressful if you do!
If you’re currently in the process of making a recruitment decision, it’s a great idea to start out with this exercise. Hiring for the first time can be especially daunting for business owners, but an opportunity analysis will help you weigh up your costs and benefits.
We mentioned the benefit of having mentors and coaches to help you when making decisions. Platinum People Group has worked with dozens of businesses, offering valuable advice with recruitment decisions. We’re here to help you if you need some external input. Reach out to us for a free business consultation.
You can also download the worksheet we use to complete this exercise:
> Download your complimentary opportunity analysis worksheet <
