The Importance of Making a Decision, Any Decision

Waiting too long to make a good decision is a bad decision

In business (and life, for that matter), a good decision made too slowly can be as bad as a bad decision.

Decisions are part of life

We are faced with decisions every day in our life. Some are more consequential than others.

In The Matrix, Neo had to choose between the red and blue pill.

In Sophie’s choice, Sophie must make the decision that no parent ever wants to make.

In Robert Frost’s famous poem, the author chose “the road not taken” and that decision made all the differences in life.

Fortunately, not all the decisions we make are as big as those, but we do make some pretty big ones in the course of our lives.

I have made many good and bad business decisions in my life

I have been an entrepreneur since 1993. I currently own two bars. I have bought and sold a handful of businesses over the years.

I have also seen a lot of good opportunities slip away because I was not willing to pull the trigger.

I erred on the side of caution and because of that, I missed out.

Am I advocating making reckless decisions simply for the sake of being fast?

Absolutely not.

It is important to make fast decisions, but make these decisions based on intuition and experience.

Then, be quick to adjust if it wasn’t the best decision.

A critical juncture in my life

When I bought my first bar, I looked at all the numbers when I was trying to decide if it was worth doing.

I had bar management experience and felt confident about my estimations of the costs that it would take to run the bar and the sales needed to make money.

I looked at the bar’s current costs and sales and I projected costs and sales of what I thought the bar could do with some upgrades and new management.

The numbers did not add up. The margins would be so tight that I thought the venture would be too risky.

I called up my business partner and told him that I didn’t think we should do it.

He was a friend who had access to more money than I did at the time. He was disappointed but trusted my expertise on the matter.

I, too, was disappointed when I went to bed that night. The numbers kept rolling around in my head.

For the most part, the numbers about projected costs and sales came from me and my experience.

I have always been conservative when it comes to money. I just didn’t like to take too many risks with my own cash.

I knew my projected costs were too high, but I wanted to be safe.

I knew my projected sales were too low, but I didn’t want to take any chances.

My numbers were the worst-case scenario.

Why make a business decision based on the worst-case scenario?

Wouldn’t it make more sense to make the decisions based on the most likely scenario?

Yes, when you cross the street, you might get hit by a bus.

But, if you are smart and careful, that is not a likely scenario. Should the distant possibility of getting hit by a bus keep you from crossing the street?

Of course not.

In the middle of the night, I jumped out of bed and ran the new numbers — numbers that were more realistic.

There was plenty of meat on the bone to meet the costs and make money.

The next morning, I called my partner and convinced him that I had been too conservative on the numbers and that I was confident the deal was a good one.

We ended up buying the bar, and it turned out that the actual sales were way higher than even my adjusted realistic projected sales.

We had no problem paying back the loan and the bar produced plenty of profit over the years.

Making a decision, any decision is what is important

There are always a thousand reasons not to do something. If you always consider the worst possibilities, then you will be tempted to never get involved in anything.

I like to make my decisions based on probabilities. The greater the risk, the greater the reward must be.

I am not saying to always take risks in business. As a matter of fact, I rarely want to be the first to try something.

I prefer to watch someone else take that chance but be quick to jump in if it looks good.

There is still plenty of room to make money if you are the second or third to do something. You just don’t want to be the last. By then, it is too late.

Successful people make good decisions.

Successful people also make bad decisions.

But if you make more good decisions than bad decisions, you will be just fine.

The longer you wait to make the decision, the more likely the opportunity will slip away.

Instead, make the decision fairly quickly and adjust your strategy as you go.

This is a life strategy not just a business strategy

I have extended this business philosophy of making decisions to a lot of the decisions I make in other parts of my life, and it has led to many grand and exciting adventures.

There are always reasons not to do something.

But if those reasons are not very probable, then it is okay to put those reasons on the back burner and continue forward.

Keep an eye out for the pitfalls and be ready to adjust, but don’t be afraid to make the decision to do something.

More than likely, you will not regret it. If you do end up regretting it, put it behind you and make another decision. Eventually, you will get it right.

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