You’re considering starting a business and becoming your own boss as a business or self-employed. Life as the boss means you could delimit your earning potential, but that’s probably not the main attraction.
A Cox Business Survey found that two-thirds of entrepreneurs started their self-employment businesses to be their own boss and create something from scratch.
Fewer than one in ten put money as their primary motivator.
The flexible autonomy of being your own boss could unleash your potential held back by the corporate box you’ve been stuck in for so long.
Finally, you have the creative freedom you’ve been longing for. But you’ll also have a lot more responsibility as the one who makes the decisions.
Sometimes that’s tough – everything is riding on you. We touched on this in our article’ Become Your Own Boss: 10 Serious Pros and Cons’.
It’s now time to dive a little deeper. Let’s discuss the good, the bad, and the ugly sides of making all the decisions when becoming the employer and not the employee. And a few strategies that will help keep you sane and deliver more effectively.
Business outcomes depend on effective decision-making
Your business success depends upon the decisions you make. Good decisions equal good outcomes. Bad decisions… well, equal bad outcomes.
At every step in your business, you are making decisions. Effective decision-making will help your business achieve its goals.
Do you want to increase sales? Then you’ll need to decide about marketing, pricing, and products/services.
In other words, your leadership decisions must align with your overall business strategy.
It requires you to embed strategic planning and critical thinking into your daily routine. This will help you manage your finances and improve your risk management as you answer questions such as:
- What investment should you make?
- How do you monitor quality control?
- How do you manage clients?
- Should you increase prices?
But business ownership is not simply about products and services.
You’ll need to make decisions that align with your values and purpose and help you meet your client’s needs.
You’ll be wrapped up in options about customer service, marketing, product/service innovation, and more. Good decisions will enhance your reputation and brand.
Now that we’ve mentioned innovation, it’s worth highlighting that effective decisions can drive creativity and growth in your business.
The pros: decision-makers have flexibility, freedom, and financial independence
Life as the decider can free you. Suddenly you have the freedom to do the right thing fast. You don’t need to jump through hoops, send countless emails, and wait for replies. Your questions won’t get lost in the melee of the corporate process.
You won’t have to follow the processes and policies of a big business, either. You design the policies and processes.
You can explore ideas without having to seek approval from a manager.
This freedom and speed could help you develop innovative solutions and explore new business opportunities faster.
Make fast and fluid decisions, and you pivot your business more effectively. If a change of direction is required, you make it. You’re in a speedboat, not an oil tanker. As the market evolves, or if you notice customer preferences shifting, you can switch tracks and switch up your products and services.
Effective decision-making is key to your financial independence. Your decisions will determine customer satisfaction, revenues, and profits. The result of this flexibility and freedom is the impact on business outcomes.
The cons: the ultimate responsibility of making all the decisions can take its toll
Being in total control of your business’s destiny may be liberating, but that doesn’t mean there aren’t any drawbacks. Being the sole decision-maker in a business certainly has its challenges.
For a start, the responsibility is much weight on your shoulders. Your family depends upon your business decisions. So do your employees, contractors, suppliers, and customers. If decisions don’t work out, what might the consequences be?
It’s not unusual to feel isolated when all the decisions rest on your shoulders. Personal biases and emotions can get in the way and stop us from making the best objective decisions. And with no one to brainstorm your ideas with, can you ever be sure you are making the best choices?
Sometimes we need a sounding board, don’t we?
Indeed, a study by Harvard Business Review found that being a sounding board to bounce ideas off concerning organisational dynamics and strategy was one of the top three reasons for working with a business coach.
Then there’s the burnout factor. The mental stress can be exhausting – and tired people tend to make poorer decisions.
5 strategies to beat the decision pain and to profit from the gain
There’s plenty to gain from being the decision-maker. There is also more risk– personally and to your business. The trick is to mitigate the risk to maximise the gain.
There are many ways to do this, but five of the most effective strategies are:
1. Assess the risk
Every decision you make carries an element of risk, so it’s crucial to have a strategy for risk assessment. The first question is, “What could happen to the business if we do nothing?” Then you can list possible actions and analyse each for potential risks.
2. Let data inform your decision making
Data is the key to making effective business decisions. The more data you can gather, the better. Data helps to remove emotional bias and enables you to make more informed, objective decisions. It can help you identify your ideal customer, their favourite products, and service gaps.
3. Prioritise your goals
Your entrepreneurial mindset is buzzing.
Creativity literally bursts from you.
I’ve known new business owners to have notebooks full of ideas and things to do. It’s easy to get swamped, start one project, and leave it unfinished to move to the next scheme.
The result? Nothing gets completed, and your business suffers from an unclear direction.
To negotiate this hurdle, it’s crucial to set clear business goals and prioritise what actions are needed to achieve them.
This way, the decisions you make will align with your goals, be data-driven, and with measurable risks.
Prioritising your goals will also help you to prioritise your task. You’ll find that using time management tools – like the Eisenhower Matrix or project management software like Trello or Notion – will help you to keep on track, manage your team, and preserve your free time.
4. Develop a network
Even in the earliest stage of building a business – when you are the business – you don’t need to make all decisions alone.
You have plenty of advice from mentors and other small business owners who have lived through every decision you can imagine, and your customers could provide valuable insight on a decision (if you send them a survey to ask).
Develop a network that offers different perspectives, acts as a sounding board for ideas, and helps you see pitfalls in your decision-making.
5. Use frameworks
Processes are crucial to business success, and it’s no different when considering decision-making.
Frameworks help you to standardise the process of making decisions. They provide a structured approach that will help you collect data, assess risks, incorporate advice, and prioritise goals and actions. And there are plenty of frameworks, techniques, and tools that you can use, including:
- SWOT analysis
- Cost-benefit analysis
- Foursquare protocol
- Pareto analysis
Your first business decision is the first step to take
When you start your own business, you’ll find that being your own boss delivers several advantages:
- You’ll be able to make quick decisions and act decisively
- You’ll have total creative freedom, and the decision you make will impact business outcomes directly
- You can pivot more quickly and change direction when needed
However, being the sole decision maker also brings the weight of responsibility – and this could lead to stress and burnout, risk and uncertainty, and a feeling of isolation that can affect your decision-making.
Making good decisions is crucial to the health of your business. The five strategies outlined in this article have helped us grow and serve our customers successfully – from the acorn of a business idea to a company that has helped hundreds of others since our inception in 2016.
How has all this been possible? Quite simply, by putting into practice all the decision-making strategies we’ve discussed – and making the most significant decision of all: to take that first step and start my business.
Why did I do this? Because, despite the challenges, being your own boss can be the most rewarding experience you can have in your professional life. It has allowed me to pursue my passion and live the lifestyle I desire and deserve.
Take the first step. You could do the same. Be bold.
Good luck, fellow entrepreneur!