Whether it’s firing someone or working out who to promote, many leaders struggle when it comes to making tough business decisions. Be the Business found out how seeking advice and simply biting the bullet helps.
“The first difficult decision I had to make was when I made a member of staff redundant about six months after we started,” said Jo Fleming, founder of recruitment agency Yorkshire Staffing Services – which launched in 2011. “When someone comes to work for your business you want to give them the best opportunities possible. When it doesn’t work out, you can take that quite personally.”
Fleming certainly wrestled with the decision to let that member of staff go. As much as she has tried to remove emotion from big decisions as her business has grown, she agrees that some things never get much easier. Recently, Fleming found herself once again having to make an employee redundant and admitted to putting off doing so for longer than she should have.
“One lesson learned was that the delay and the procrastination of making the decision was expensive,” she said. “It’s tough to make a decision like that, though, and it can be stressful for a lot of people in the business because some of them may have to take on other responsibilities and it can lead to uncertainty within the company. It can have a real ripple effect.”
Seeking help from mentors and colleagues
As the owner of her business, Fleming accepts that the buck stops with her. However, she has come to appreciate the counsel of those around her when making difficult decisions, and said that help from mentors, her own team and from business associates is great for voicing your thoughts and, when needed, to get some different perspectives.
“I spoke to a mentor and an HR advisor when it came to this recent redundancy,” commented Fleming. “In partiuclary, the mentor was a way for me to say what I felt and what I needed to do. Sometimes you just need someone to listen and say, ‘yes, you’re right’.”
Vicki Prout, director of Sherpa Kids England, an outside of school hours child care provider that uses a franchise model, said that if she had one piece of advice to give to an SME owner it would be that they should make their decision and be done with it.
“In many instances,” she added, “decisions you make are made with the information you have available, so you gather what you have and what you know and then go for it. If information changes the following day or hours later, then you need to show flexibility to either change your original decision or stick to it.”
Either way, she feels, clear communication to those involved on why you have changed your mind or are sticking to your guns is a critical element. ”Don’t dwell, just deal with what you need to, learn and move forward,” she said.
Wrong decisions are par for the course
Making the wrong decision from time to time is bound to happen, said Prout – it’s part and parcel of being a business owner. “You cannot avoid making mistakes as a young business, it’s simply a rite of passage and in most instances a key learning and growth tool,” she said. “The next decision you then make is the important one – which is not to make the same mistake again.”
Darren Fell, founder and CEO of online accounting firm Crunch, had to make an extraordinarily tough decision almost on day one of his business launch. Already running a successful marketing company at the time, he chose to voluntarily walk away from that to immerse himself in his new enterprise. To do that he had to take a £700,000 discount to get the cash required, rather than completing the earn out and waiting for the higher number on paper.
“I had to say goodbye to a lot of money and a potentially bigger exit value to go and do something else,” he said, “but I wanted to do something bigger and bolder that would truly help people.”
Tough business decisions every day
Nine years into his latest venture, Fell told us that tough decisions are still being made every day, “The hardest ones are always around getting money into the business,” he admitted. “A business like ours needs so much cash to build our system, as accounting software is probably the most complex and expensive business software there is.”
At various points there have been venture capitalists knocking at Fell’s door offering investment, but he has turned them down because he felt, deep down, that they weren’t the right fit and that it would all end in tears. “It’s the most horrible decision to make,” he suggested. “You have all that cash on a piece of paper in front of you that would help transform the business – or do you choose to do it the really hard way and wait until you find absolutely perfect investors?”
Like Fleming, Fell feels that taking advice before making big decisions can be a good idea – he actually thinks that some entrepreneurs are too gung-ho to embrace this approach and won’t listen to anyone. “That’s where a lot of them fail,” he said. “You’ve got to listen and take a blend – talk to a number of people you trust, and then you can make the final call. Don’t be swayed by people if you think it’s not right, especially when you probably know the right thing to do in your gut.”
Sometimes, however, “you’re in no man’s land” as Fell put it, and know very little about the area in which you suddenly have to make a decision. “All you can do then is take the best advice,” he said.
Fell understands that making tough business decisions does not come naturally for everyone and, like Prout, believes the best thing that people in this situation can do is stop procrastinating and take action. “Just make a decision. If it turns out to be wrong, then quickly change it,” he said. “Fail fast, as they say. Sometimes you have to say, ‘let’s just do it’.”
If you can learn to be more decisive, it will not only let those around you see a business leader who is prepared to take action, but it should come with an added bonus that will be good for both owner and the business as a whole. Jo Fleming explained: “Once you’ve made a difficult decision, you can kind of move on,” she said. “Dwelling on things can really cloud your mind, and no matter what it is in business that needs dealing with, when it occupies your every thought it stops you from growing your business. Tackle it head on and move on.”
Further reading: Have a look at the management style changes made by successful business leaders.