Tough Decisions Every Entrepreneur Will Inevitably Face
One of the burdens of being an entrepreneur is having to make hard decisions. But since changes often come disguised as decisions, it’s something business owners have to get used to if they want to experience growth.
Many of the decisions you have to face over your life of the business will either affect your business in the long run or it will have a short impact on the success of your business.
Here are some of the most difficult decisions that you may have to make with your business at some point. Perhaps you have already made them at least once.
1. Letting Go Of Employees
There may be problems occurring in the organisation if a certain employee’s behaviour becomes counterproductive. It can range from an employee’s ineffectiveness to disobedience to bullying in the organisation. The first time you see these signs at your company, it’s going to be hard to decide how to deal with it. Know that if you are unable to resolve the situation by talking to the employee or taking any minor action, it’s high time you decide to terminate the employee. This is never an easy decision, but you must be prepared to do it when it becomes necessary.
And letting people go is of course not always just due to job performance. Sometimes your business might hit tough times, and you have no option but to let go of good people. This is when the situation can get really tough, and I would be lying if I said this is not one of the toughest things a business owner must face. But you have to move ahead and take the right decision. If you can find no other way to lower costs or if you simply do not have enough work for the existing team and do not foresee that changing in the near term, then those high employee costs will threaten the very existence of your company.
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2. Dealing With Tough And Unprofessional Clients
In the early stages of your startup, it is quite overwhelming to receive your clients and to keep them, you are making every effort possible even if that means late nights or doing work outside of the contract at no additional charge. Though, there will come a situation when a client crosses the line, either demanding excessively or being rude. And it won’t be worth the headache keeping the client as it will also result in decreasing team morale.
It can be quite difficult to voluntarily say goodbye to a client, especially when you’re a small company, but you always have to understand the pros and cost and how it will cost your business on a financial level to keep a difficult client around for the long run.
3. Whether Or Not You Should Expand
Sometimes keeping your business small may seem more manageable, as you can personally oversee most components of the day-to-day operations. However, the temptation to expand can be strong. Sometimes it’s the lure of new revenue, or sometimes it’s simply the potential for something new and exciting.
It’s not a decision to be taken lightly: If you decide to expand — whether that means hiring new employees, increasing product selection or partnering with another business — making sure you grow wisely will be of paramount importance.
You can ask yourself questions whether “You have the strategies in place to keep up the quality of your product?” “What market or financial conditions will influence the success or failure of your expansion?”
4. Outsourcing Or Keeping It In-house
There will come a time for every business, without exception, when the need for additional personnel or an inflow of new skills becomes non-negotiable. It is normal to think you need everything under your control to make it run. But this is a mistake, and it will cost you time and a lot of pressure.
Outsourcing is a good way to get stuff done while staying focused on what you need to do. So, as an entrepreneur, you need to decide what you can pay people to do and what needs to be done yourself.
The best option when you are faced with such a decision is to assess costs and benefits involved with each of the above choices, and then make a wise decision that will help your business in the long run.
5. Making Decisions During A Crisis Or Deflation
With the coronavirus pandemic tightening rules and restrictions around the world, it’s natural for entrepreneurs and businesses to see a growing concern rise with respect to surviving this market.
This primary thing to do in this situation is to react fast. Start by taking an extensive, hard look at your costs and highpoint any abrupt savings that can be made. You’d be amazed at how many ways there are to cut down on a few of those fixed costs. In hard economic times, many companies avoid having to make staff cutbacks but during tough times you are likely to have to make a decision and if you have any employee working at less than a satisfactory capacity, you have very little choice.
If losing staff isn’t an option you have to go about considering to freeze bonuses or reducing salaries. Just remember that communication is always a key. Speak honestly and openly to employees as soon as you start experiencing problems, and what you’ll find is a team that comes together. Even during this phase, your team might surprise you with a strength of morale.
You also want to consider treating this as an opportunity to build loyalty with your clients rather than taking up new ones which can cost you more financial trouble.
None of these decisions will be easy. The best advice we hear is to make informed decisions. Research each step, learn and read your options. Then, once you’ve made a tough decision, don’t look back. It’s best to understand mistakes will happen. You might make the wrong decision. But failures are an essential part of the process. Most importantly, remember to celebrate your successes as they come, because they will.