Some business owners tend to experiment with their business by making flippant decisions. Many entrepreneurs have the mentality that it’s good to try new things, but off-the-cuff decision-making in business can be unwise. Successful entrepreneurs like Warren Buffet and Jeff Bezos argue against impulsive decisions. Buffet emphasizes that decisions, no matter their scale, should go through an evaluation process, while Bezos says that being in the right frame of mind is vital before making business choices.
Here are some tactics that Buffet and Bezos consider before making decisions:
- How will this affect the long-term? — While it’s easy to see the short-term benefits of a choice, long-term results may be harder to predict. Every decision you make should be good for your business down the road. Another business may offer you an instant profit, but if the decision has adverse implications for the future, it would be better to decline the offer. Bezos calls this way of thinking the “regret-minimization” framework. He thinks of some point in the future and asks what his future self would think about the decision. He makes his final choice based on that insight.
- Are you focusing on what you know? — To make money, many investors and businesspeople will look outside their comfort zone. Buffet’s simple secret to success has been to stay in his “circle of competence.” This idea means that he’s never ventured out of what he knows. As a result, he has higher levels of competence and confidence in all that he does.
- Is this important and urgent? — Another framework Bezos uses is the Eisenhower Matrix. The matrix centers on the idea that things that are urgent aren’t always important and vice versa. If something is both important and urgent, it should be done now. If it’s important, but not urgent, you need to decide on a time when you will do it. If it’s urgent, but not important, delegate it, and if it’s neither important nor urgent, delete the task. By keeping this evaluating mechanism in mind, you can prioritize decisions more effectively.
- Are you jumping around from thing to the next? — This kind of question can be applied to your business and career choices as well as your personal life. Buffet pointed out that some people leap from venture to venture, job to job, relationship to relationship. While it’s important to move on from something that doesn’t benefit you, it’s also important to realize that those decisions have consequences, including dragging down your career and wasting your time. With that in mind, if you are unsatisfied with an aspect of your life, come up with a plan to change it and make decisions based off of that plan. Aimlessly meandering through life won’t get you to where you want to be.
When it comes to making decisions, it can be hard to know the right thing to do. However, if you take a good look at your options and ask yourself the right questions, you can make decisions that will improve and enrich your business and life.