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Importance of Quick Decisions

Decision making is a process that means action taking. It is present in every aspect of our lives. We make personal and business decisions. Personal are related to our personal life and our family and business are related to our business or job. But, decision had an important part in executions and success of the executions – time frame of each decision.

Quick Business Decision Making Process

Quick Business Decision Making Process

In the previous post about entrepreneur visionary and opportunist, I write something about why opportunists never find their opportunities. The answer is because they are busy in seeking new opportunities because when they find real opportunities they never made a decision to use it.

Why Quick Decisions are Important?

We cannot expect to remain forever in the process of decision making. The end or the results of this process is a decision. The life of an entrepreneur and managing successful business need quick decisions, because there is the existence of dangers that the same decisions will be made from competition.

As most important reasons why you as an entrepreneur must make quick decisions I would mention following:

1. Quick Employment of Opportunities

If you find an opportunity, it will not have value for you or your business if you’re not employing it. Because of that you need quickly a decision how to use it and who will implement needed activities about that.

2. Quick Response of Customers Needs

You as an entrepreneur and your business exist because of your customers and their needs. If you find changes in their needs you cannot make decisions forever about how you can satisfy their new needs. Around your business always will be competitors that will wait for your passiveness. Because of that, there is a need of quick decisions.

3. Quick Response on Competitors Activities

As you continually accomplish different business activities, also your competitors didn’t sleep. Each of their step about a business, or market will need your contra step. Because of that you must quickly decide what will be your contra steps.

Speed Versus Quality

What is the affecting of speed of decision making on the quality of the decision?

The quality of the decision certainly depends on the speed of making it. So we can say that the decision quality is a function of speed of making it.

Quality decision = f(speed); higher speed means less quality and vice versa.

This is logical, but not only. One thing is certain, behind every good and quality decision is information on which we make that  decision. Decisions are made by entrepreneurs and the speed depends on it. How much more information entrepreneur have it will be harder to make quick decisions. This is because the speed of decision making is a function of available information and an entrepreneur. So the previous equation will be:

Quality decision = f(available information, entrepreneur);

I will try briefly to enter in this secret about information and an entrepreneur as a basis for decision-making speed.

How much more information entrepreneur have it will be difficult to decide,  it will take more time. Sometimes it will never have enough informations to deciding, and the speed of this process will be very slow and time can go to infinity, or in a situation not to decide, which in this case is not good. This is the case because they will spend their time on collecting needed informations. On the other hand, informations should be processed in a certain form through which entrepreneurs can discover easily and quickly some trends and some hidden trends that will be useful for deciding. So, for quality decisions entrepreneurs should have an optimal amount of information in a form that allows estimations. With this in mind our formula from above now looks like this:

Quality decision = f(f(optimal amount of information, form), entrepreneur)

If they want to draw some quality conclusions from the informations presented in an appropriate form they will need to have a certain ability to recognize trends in such an incomplete information. I say incomplete information, because our goal is to make a quickly quality decision. Therefore, it is necessary entrepreneurs and managers to have analytical skills. So, quality decision in a small interval of time will be represented by the following formula:

Quality decision = f(f(optimal amount of information, form), analytical skills of the entrepreneur)

Analytical Skills as a Basis for Quick Decisions

As you can see an analytical skill is the ability of an entrepreneur based on incomplete informations to draw conclusions and to make quality decisions. It is believed that successful entrepreneurs make a quick decision and their own thinking for the correctness of the decision is 70%.

The characteristic of analytical people is to look into a group of information where they will find something interesting that other average persons cannot see nothing. Knowledge is a requirement to an entrepreneur to be analytical.

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What Easter Can Teach You About Business?

When I was a child my favorite holiday was the Easter. I think that also now every child loves this holiday, especially as they collect colored eggs and receive money from family and friends. But, for the parents this day is the same as when they manage the business. Here are some common things between Easter and business that we can learn from this great day.

Business and Easter

What Easter Can Teach You About Business?

1. On Easter, We Have Goals

With my son, on this holiday we have goals to go at all my lovely people to congratulate them holiday. In the business also we must have goals that must be accomplished for business success.

2. If We Get Up Early, We Will Have More Time to Fulfill the Goals.

This rule is present everywhere. In some period of my life, I really was getting up late, working until the early morning hours. However, in such a life habit my productivity was really nowhere. I become most productive at 09:00pm when nobody else works at something. When I get up earlier the day is really long enough.

3. My Goals Must be Real, Because I Can’t Achieve Everything

This day is long 24 hour as every other day. I can not be present everywhere although I want to be. The same is in business. It is not good to start several projects at once because in such a case the quantity will destroy the quality of the finished work. It is better to choose a few most important things that you can finish in a given period of time instead to be unrealistic to do more things that you can’t finish. As for Easter, when I make a priority about first and second day, entrepreneurs must prioritize which projects should be completed as the first, which will be completed later after the firs one.

4. I Need a Plan

Without a good plan, I can’t achieve my Easter goals. The same is in the businesses. Without a good business plan, the business will be as a man loosed in the wood without a compass.

5. The Communication

On Easter, I go to the people, and people come to me. If we don’t communicate we can’t see each other on this day. The same is with the businesses that today they are simply a process of communication with suppliers, customers, employees …

6. Pressure Have Negative Effect

Nobody wants the pressure because it creates anxiety and panic. In my case at the first Easter with my son, the pressure that I must to go at many places disastrously affected whole that day. The same is in the businesses. Problems can’t be solved with pressure. Management does not mean pressure, but extracting the potential of employees in favor of business. Planned activities are not dealt with pressure.

This is my list from my previous experience on Easter with my son and probably it is not final.

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Business Systems – 7 Benefits

Systems are useful for any business. They will give us many benefits if they are properly designed and not excessively emphasize the administrative function that can turn it into a bureaucratic organization.

This is the second part of the previous post System – How to Implement in Business in which I want to talk about several benefits for an entrepreneur and his small business when he/she implement a systematic approach in their businesses.

The Benefits of Business Systems

The Paper Work With Systems is History

With the right business systems, your business can:

1. Meet Customers Expectations

Your marketing system will have a subsystem who will monitor the expectations and satisfaction of consumers. The subsystem will analyze, measure, compare and give conclusions in terms of what customers want, and what they don’t want. In this way, you will have constant information on what must be improved and how to improve it.

2. Produce the Same Quality Results Every Time

This can be achieved only with systems implemented in businesses. Imagine what will happen if you don’t have a system which will make the structure of each business activity and tasks for each employee. All would work differently at each repetition of the tasks and will have different results from realization. Therefore, systems should ensure a quality realization of activities each time with same or better quality than previous.

3. Improve Employee Performance

Productivity is the work done in certain period of time. If you complete the same job faster, the productivity will be higher. If any business activity is finished faster than last time your employees will become more and more productive. The productivity will also increase their performance. The goal of the system is enabling proper education and opportunities to employees to complete their work more efficiently and effectively.

4. Reduce Costs

If the business activities are not repeated several times to be finished and completed quality, it will dramatically reduce costs due to limited errors in business. Every activity must be completed with high quality from the first time.

5. Be Highly Organized Business

The only thing that provides the quality organizations of the businesses is systems. Without adequate systems, it is hardly anyone to be organized, and because of that it will have difficulties to perform tasks as needed.

6. Solve the Problems on Consistent Basis

Systems implement feedback. Feedback sends us signals about problems  that occurred and can be quickly solved. Problem solving is a change. Change is an improvement. So you can constantly improve your systems and thus overall business.

7. Increase Profitability

And of course at the end due to all the previous benefits you will increase profitability. By increasing productivity and performance, reducing costs, satisfying the expectations of customers, delivery the same or better results every time, better internal organization, and constant problem solving you will increase profitability of your business.

So, you need only to spend several hours in the next few weeks to establish a systematic approach in your business. Then, simple follow them and improve. These benefits are much greater in terms of what you must to invest.

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Business Information: Oldness or Relevance?

Today, a business and an entrepreneur cannot be imagined without information. Information is the basis for making quality decisions. However, it was not about any kind of information, it is about quality one. If they are important to an entrepreneur, then the sources will also be important.

When we talk about informations a year ago I complete a survey about business intelligence in 30 small and medium-sized businesses. The results of this research were published in several international scientific journals. Business intelligence is a creator of knowledge for businesses and entrepreneurs. But, the basis of a business intelligence is information.

Business Information Boat

On the other hand, I worked 3 years in Customs Intelligence Department, where the information was more sensitive. However, there I learned many things because I was trying to simplify and automate the process of collecting and processing the information.

One thing is important and must be remembered from entrepreneurs: informations are one of the most valuable resources of businesses.

Business Information Sources

If we want something to be classified as quality or important we must assess their source. There are many methods that are used about the source assessing, and it’s are systematized processes which after completion will tell us whether or not to take the information as a something serious.

Businesses can use two types of sources:

  • Internal source. It is own databases or records, newsletters or reports in the business.
  • External source. This is informations from everywhere outside of business.

Especially interesting to me is the external source. In the study that I mentioned in the beginning of this post I find that internal sources are processed somehow from businesses in the form of reports or Excel spreadsheets and graphs. However, what is worrying me is that the concept of a systematic information collecting from outside the business is not established or not knowing how to establish, or it is not knowing from entrepreneurs why they would use that process.

We will take one example. You are an entrepreneur that thinks about expanding the business in other regions in your country. To make a quality and right decisions you need information about:

  • Customers. What are their habits, behavior, income, desires, problems, etc…?
  • Competitors. What they offer? How they are selling their products and services? What are their future plans?
  • Investment. How much money should you invest?
  • Return of investment. How and when you can return that investment?

Let’s take another example. You as an entrepreneur should continuously expand your knowledge. Knowledge can be expanded via:

  • Reading a book,
  • Reading the newspapers and magazines,
  • Reading the web page on the Internet and so on.

Older or Relevant Information – What’s Better?

Finally, I come to what is my purpose in this post. Often we reject the adoption of certain information in our brain and that is only because it is old.

For example, we refuse to read a book just because it is older. We reject it, although we are aware that we have not collected all the knowledge (and we cannot) and that book really can have quality information for expanding our knowledge. Do I have to reject the book by Peter Drucker, which is 15 or 20 years old just because it is old? The answer is certainly no. From that book, I can learn a lot about business from one and only business guru all over the world. If you looked in the new books, nearly all will have a reference to some of his works. Should I discard book by Abraham Maslow only because it is old, although in that book he talks about the hierarchy of human needs that are also relevant today?

Age of an information is just the time when it is produced. But, their relevance is simply their application in our today’s life. Both criteria are important in different circumstances of the decision-making process.

Let’s continue with a book as an example. I have 50 books about math in my private library of nearly 400 books. The oldest book is from 1903. What I am surprised is the same relevance as the newest books. In both is stated that 2 + 2 = 4.

If you use both criteria for selection and apply the criterion about age first, immediately should follow the question: Is it relevant?

Relevance should always have priority over the oldness.

Here are more examples:

  • As an entrepreneur, you should decide about a new product. You have a database with answers from questionnaires on such a product from the last 10 years. Probably, you will not reject the older data because with them, you can see a trend or pattern of behavior of potential buyers of such a product.
  • As an entrepreneur you need to bring a decision, whether to expend your business in Moscow or not. After that you read that Hitler in the 1940′s attacked Russia and come almost to Moscow. Is this data old? Yes, it is old. Is it relevant? No, it’s not. In this case ignore the information because it is not important for what is happening today for your business.

Once again: Always check first whether the information is relevant, or whether it is worth in modern terms before you reject because oldness.

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Business Idea – What’s Next?

The business idea is a starting point for any current or future entrepreneurs. They are important because represent beginning of a new life – a life of a business and a life of an entrepreneur.

business ideas questions

But, an idea is important only in that initial stage of a startup. The consequences of the business ideas will be felt in all phases, but in large part will depend on other activities of an entrepreneur.

An average person always has some type of many ideas. It is the very nature of humans to dream about better life. However, ideas come and go from the brain of potential or current entrepreneurs. If we don’t want to allow the ideas to go from our brain, we can use the business idea’s book. The template of such a book you can download here.

Well, we have an idea and now the question is: what’s next? In this post, I can’t cover all entrepreneurial activities, but simply what you as an entrepreneur must undertake when you come with a good idea.

Continue Reading…

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Strategy – The Quickest Way to Transform Your Small Business Results

strategy
You need a strategy in order to start building and growing your own businesses. You want to be strategic and not only small businesses that want to survive the month?

From my my experience my thinking is that the most of entrepreneurs aren’t strategically but they are more and more tactical oriented individuals. Their biggest worry is to generate enough income in order to pay bills and to survive the month. This means that small businesses doesn’t have and use strategies. This means that growth and development is not important, but only survival.

What is the Strategy?

Strategy is a plan of actions required to achieve specific set of goals that your business want to achieve. To implement a strategy it is necessary to have more tactics. For example, if your strategy is to build long-term business relationships with your customers, tactics that you can use can be providing additional services to regular customers, training, long-term contracts with lower prices, etc. Each tactic has specific activities that must be accomplished in specific time, and responsible persons for the completion of those activities.

The Merriam-Webster Dictionary defines it as:

  • a careful plan or method
  • a clever stratagem
  • the art of devising or employing plans or stratagems toward a goal.

We can easily note that:

  • Strategy is the means to meet business objectives.
  • Strategy is a specific type of plan in which there are specified actions that you as an entrepreneur will need take.
  • Strategy is composed by tactics that on the other side are composed by activities with which you will meet the desired objectives.

I have seen various “so-called” strategies. They seem more as a textbook with 20-30 pages and refer to the period of 3-5 years without any specifics that must be accomplished. As you can note from above if you want to implement strategies, it is necessary to determine specific tactics and define all activities for each tactic.

My recommendation before proceeding with a change of strategies is first to look at the definitions in this subtitle. Then look at your business actions and see whether it is tactics that you accomplish from time to time, or it is a long-term strategy.

How to change the strategy?

Changing the strategy is not desirable to do on an everyday basis. It is better to spend more time to prepare it and commit to its completion. I have a bad experience with frequently changing one strategy with another one before the finish of a deadline for which is provided the first one. In such a situation, the employees and consultants that work for that organizational system don’t know which one is in force.

The strategy was prepared by top management of the business, and is implemented and executed by all company members.

I will try to define an approach with 6 steps that can help you succeed to conduct strategic planning in your business and to change the current strategies if you have it, or maybe you think that you have it.

  1. The first thing is to be sure you have strategies that your business follows, although you are not satisfied with it. You do not need a strategy that will sit in a drawer and holds dust. If this is the case then it is better not to waste your time on this.
  2. Once when you are sure that you have and follow the strategy it is necessary to adjust the same strategy to make it proactive, rather than reactive. Don’t think about what somebody else makes. Think about what you want to achieve and do.
  3. Think about what you need to do to receive the best results in the quickest time on a longer term basis.
  4. Once you understand what it is that will give you the best results in the quickest time on a longer term basis you can start thinking about possible tactics.
  5. For each tactic prepare specific activities with deadlines and persons responsible for carrying out these activities.
  6. And of course at the end is system thinking. Establish feedback for measurement and monitoring of implementation.

Micro Businesses and Strategies

If you own a micro business with few employees or without employees it doesn’t mean that you don’t need strategic thinking implemented in business. This is a big mistake. Are small businesses having their own goals? Certainly, I think yes, if nothing else in the first year the goal is survival. How then they will survive? Will they offer an advantage to the customers or will provide more quality service? Will they apply new marketing methods and techniques? All these ideas are survival tactics as a part of the business strategies. All of this tactics will be followed by activities.

The difference is that person that prepares the strategies will be the executor of it in the same time.