Business Decision Making

Business owners make decisions all the time. Some are as simple as a "Yes" or "No" answer. Others are complicated by employee law, contractual obligations, or cash flow situations.

The method used by business owners to make their decisions varies from what their gut tells them to what their legal counsel advises ... and other variants in between. The "in between" is what this article covers.

Business owners need a business plan, with a strategic marketing component, to help them make their business decisions. It's a critical management tool that defines the scope of the business, such as what the products and/or services are, where the business is positioned in the competitive environment, and who are the likely users or consumers of the products and services. When all of these elements of a business are clearly defined, the business owner has a matrix to use in making decisions about the business.

The best example is when it comes to advertising. If the business plan has identified the potential consumer of the product as women between the ages of 24 and 35, making decisions about advertising has become less complicated. The message is targeted to this demographic profile and is delivered through advertising channels most likely to produce a positive response from the target audience.

In essence, the business plan becomes the trunk of the decision tree. If the roots have a good foundation in viability, the trunk will support a growing, profitable business.

Success should be planned, not left to chance.