As an entrepreneur, you must make different types of decisions on the everyday basis. You must choose directions. Also, you must solve problems. You must take actions. The decision-making process is one of the most critical processes in your company.
Simply, you as an entrepreneur will make decisions about everything.
Some decisions are more influential on your overall business processes, but some of them are small decisions without significant effect on your business as a whole.
Let’s try to describe the decision-making process that you can use in your business as an entrepreneur.
As I have already said, the decision-making process is one of the most critical processes in your business. You can see different types of this process in reality, but generally, they all have the same purpose – effective and efficient decision that will bring results to your business.
The most common used approaching in the decision-making process is according the following steps:
1. Recognize the problem – the gap
First things, first. Every decision-making process starts with the problem or some discrepancy that exist between the desired and current state. You have the desired state, and you have an existing state. The difference between these two is the gap or problem that you must solve through the decision-making process.
In this step, you can start with your vision about the desired state of your company and goals you want to achieve.
Here are some questions you need to answer as a part of this step in your decision-making process:
- What are the most critical desired states for your small business?
- How close is your small business to these states?
- Why are you close or not close to the desired states?
- What are the most significant problems here?
2. Analyze the problem
After you find possible problems that require solutions you can start with the analysis of already defined problems. How these problems impact on the achievements of your small business?
At the end of this step, you will need to have a list of possible problems sorted by their urgency for the solution. In your analysis, you need to find causes and how the problem impact on your small business. If the impact of the problem is higher, also the importance of the problem will be higher.
3. Define possible solutions
This is the step when you need to start brainstorming all possible solutions for a given problem, or problem you want to solve with that solutions. For the most critical problems, you analyze in the previous step, create possible solutions.
When you think about solutions, also think about the causes of the problems. If you don’t remove the causes, your solutions will be only a temporary solution. Your decision-making process needs to include possible causes of each identified problem.
4. Analyze all possible solutions
Because in the third step you come to more than one possible solution for a given problem, in this step you need to analyze all proposed solutions to rank them and make a decision that you will implement in the future. This step will need to give you the rankings of all possible solutions from the best ones at the top to the worst ones at the end of your list for each problem you discover at the beginning of the decision-making process.
5. Select the best solution for the application
Now is time for the real decision. The final result from the decision-making process is a selection of the best possible solution to the problem.What will you implement as a solution for the given problem? The answer to this question will be the decision you are making.
6. Implement the decision
We can’t talk about decision-making process without the implementation of the decision you have made. You will not finish the job until you don’t implement what you have decided. Can you solve the problem only by discovering the solution and making the right solution? No, you will not solve your problem. You need to implement the solution and check the results to see if the specific solution really solve the identified problem.
As you can see the overall process described above can be divided into the following four parts (see picture below.)