Our lives are filled with difficult decisions. The same applies to business owners, who sometimes have to deal with a lot of pressure and develop the best solutions in a limited time.
5 Biggest Decisions Business Owners Make
Besides trying to pick the right side in the VoIP vs. PBX debate, they also need to decide what type of business they want to run and if they’re going to opt for long-term or short-term staffing. Moreover, they have to evaluate whether they wish to outsource managing their finances to some other companies or not.
More often than not, you also need to pick a side to keep your business afloat. To not mess things up when the moment of the decision arrives, you can take a look at some of the most commonly made business decisions. Here are the biggest decisions business owners make:
Choosing Your Type of Business
When you decide to start a business, the first thing you need to do is determine what it will be all about. For example, if you want to open a retail store, you need to pick the right location and find some great staff. However, before doing that, you need to figure out if you’re going to be a proprietor or a franchise. If you opt for the latter, you’ll need to find the right franchise opportunity and make sure you’ve got enough financing.
When it comes to choosing your type of business, there are four major options: proprietorship, partnership, corporation, and LLC. Of course, there are other types of organizations available as well. Before making any decision, you need to make sure it’s in accordance with your own skills, business goals, and expectations.
Choosing Your Target Market
The next step after deciding on your business type is figuring out what your target market will be. This is where most entrepreneurs mess things up as they try to overreach when picking their market niche. If you don’t have enough experience in the industry, it’s best to stick with something you already know about. For example, if you’ve been in the construction industry all this time, you may consider opening a new store that sells construction equipment.
The same applies to starting an international business. If you don’t have enough contacts abroad, it’s not the right time to expand your company’s horizons. Instead of trying to expand your business too early and fail, it’s better if you learn from your past mistakes and improve your skills first. The best way to do so is by investing in some business education courses so that you can make smart business decisions in the future.
Choosing to Outsource or Not
Another big decision business owners make is whether or not they’re willing to delegate some of their tasks, such as accounting services and managing finances. There are several reasons why some entrepreneurs choose this option over organizing everything themselves.
First and foremost, outsourcing helps save money as you won’t need to hire a full-time employee for doing these tasks occasionally. Secondly, you don’t have to invest time in these activities anymore; instead, it frees up time for other things that are more important for your business’ success.
As outsourcing the financial side of running a business is one of the most frequently made business decisions, there are three different options you may want to consider for your business:
- Hiring a bookkeeper. If you’re looking for an easy way to manage your finances without spending extra money on an accountant, then hiring a bookkeeper might be a great idea. However, before doing that, you need to make sure this person is qualified enough for the job. It would also be best if they had previous experience in this field as they’ll be able to spot any potential issues with your company’s financial records sooner rather than later.
- Outsourcing financial management. Hiring a financial manager means outsourcing your financial management duties entirely to another company. They will provide complete financial management services for your company, such as payroll processing and tax preparation. However, if you decide to go this route, make sure you hire an experienced company with the necessary certifications.
- Hiring a CFO. Another way of outsourcing financial management is by hiring a Chief Financial Officer (CFO). You can either hire someone from outside or promote someone from within who has enough knowledge about this area of expertise. This person will be able to handle all the financial management duties for your company and even act as its representative at meetings with investors or banks.
Choosing Between Long-Term and Short-Term Staffing Options
Another big decision that many entrepreneurs face is whether they should rely on long-term or short-term staffing options when hiring employees for their business. When deciding this matter, it’s best if you look at the type of work needed for each position in your company as well as how long it will take for your company’s projects to be completed.
Also, consider whether the market demand for short-term staffing is high or low at the moment and whether there are plenty of candidates around who can fill in these positions for your company or not.
As a rule of thumb, long-term staffing is always better if there are plenty of candidates available. At the same time, short-term employees are usually more expensive and have a lower retention rate due to their short-term contracts with employers. However, they are also more flexible in this sense as you can adjust your staffing according to the company’s needs.
Deciding on the Right Type of Equipment
Finally, one of the biggest decisions business owners need to make is what type of equipment they want to use for their company. There are two primary options here – to purchase or rent.
If you don’t have enough money to purchase all the equipment you need, renting it might be a good solution. However, if you plan to use all the equipment for a long time, it might be better if you purchased it instead.
Running a business on your own requires a lot of patience and determination. And in most cases, decisions that you make at the very beginning will determine the future course of your enterprise. For this reason, you must think practically and pragmatically to make decisions that keep your business flexible, not suffocating on paperwork.
Outsourcing whenever possible and keeping yourself focused on your business goals and priorities will allow you to make your business thrive.