A Smart Business Decision Maker = A Successful Entrepreneur

Many successful business leaders all share a common skill that most people do not posses. Although this skill comes in all forms and is dependent on the amount of opportunities given to them, they all still have to undergo a process whether it takes a long time to process or a very short amount of time. That skill, my fellow entrepreneurs is: Smart Business Decision-making. Every day people from all over the world make decisions. You may not realize it but you, the reader, just made the decision to read this article (Thanks by the way!). However, let’s take it to a business perspective; business leaders, (including yourself) “make dozen of decisions a day” that creates an impact to the success of their company while creating an influence factor to employees as well. “Developing such a skill requires a combination of education, experience, and intuition.”

Marci Martin, author of Business News Daily who wrote the article “How to Make Effective Business Decisions” has stated a great quote: “There are many things that influence how an individual makes decisions. They include emotions, perceived personal and professional risks and rewards, preparation through experience or education, deadlines, stress and a host of others. It is important to mitigate the irrational and embrace the rational.”

Many decisions always comes with a process, as mentioned above, there are many factors that come into play before coming up with a conclusion. Some of those decisions usually come from a “gut feeling” while others come from undergoing a long process of asking others, and a more common form would be the opportunity cost (Is it more beneficial to me than the cost?). As Martin mentioned, the “bottom line is that being an effective decision-maker requires practice.”

Gayle Abott, President of Strategic Alignment Partners, a human consulting firm, has implemented a four- point strategy to deploy whenever you must act:

–          Identify the problem.

–          Analyze the possible solutions

–          Evaluate the possibilities that are likely to bring you closer to your goal.

–          Make the decision.

However, as easy as this 4 point system sounds, this type of strategy does not come easily for any beginner. As Abott has said in Business News Daily, it takes years of practice to master this skill. Many people who have become masters did not simply start off as talented decision makers, they made many mistakes in the past, learned from them, and simply moved on. The most crucial part in any decision making in a business, is the ability to learn from them. It is not easy as you think it is because people still make the same mistake, whether it’d be motivated by an emotion, by influence, or by stubbornness. The reality is that, it will not be easy to become a smart business decision maker until you have made enough decisions to consider yourself a smart business decision maker. 

How to Deal with Stress of Running a Business

Are you a business owner who has been through a lot of stress these past couple months? Especially, when tax season is coming and you have no one to prepare your tax forms for you? Well, let us take a moment to tell you that, if you are reading this blog post right now, you are probably looking for someone to prepare your tax returns or looking for a CPA accountant who can do that work for you. In fact, we are a CPA firm in case you haven’t noticed!

Anyway, this blog post is not about how to hire an Orange County CPA, the main point of this blog is to talk about how to deal with stress when running a business. So how can you deal with it? According to Pratik Dholakiya, Co-Founder of E2M, he wrote an article called 3 Tactics for Dealing With the Stress of Running a Business, which talks about dealing with stress and said that an entrepreneur is always required to be involved in every activity that their business is undergoing, always taking on new challenges, and creating bonds and relationships while learning on the go. Of course, as Pratik mentioned, will be overwhelming, which is something that most entrepreneurs face.

Pratik listed out three powerful ways to fight against this overwhelming stress that will keep you on track with your business goals without going insane.

 

1)      Create a priority list, and list all of your goals in a list from most important to least important.

Sounds easy right? It is! If you actually take the time to do it. The overwhelming amount of work you have to do is actually not that bad if you know how to prioritize and focus through them on the entire day. Keep a list of priorities and keep a list of dates to make sure when to start on those, and when the deadline is for each of them. This is very important, as this will keep your mind organized, and you can keep a simple focused mindset without going off in a tangent. Complete the task that is most important, and then once that is complete, move on to the next one and complete that one, and keep going through them all until you have completed them all. If you have a reoccurring event that constantly needs to be taken care of, always keep that task in your list.

 

2)      Relax and clear your mind before you go to bed, go back into work mode the next morning.

Of course, every night, we all feel like we have so much information in our heads that we just want to explode. The endless thinking is killing us all, and we just want to keep thinking. Do not try to fight through this complicated matter, instead, clear your mind, and then set yourself up to think about first thing tomorrow morning. You will feel refreshed the first thing in the morning, and your decision making will be better than yesterday’s.

 

3)      Analyze and reassess your circle of control

Pratik explains how we should focus our energies on things that are directly in our control and how we should not be drawn to things where we have little to no influence over. He makes a good point about how most entrepreneurs start with a great idea of what their circle of control has, but as time progresses and they meet new business people, the circle will consistently change. Depending on the entrepreneur, the circle will either shrink or it will grow. The point is, it will not stay the same, it is always changing, so it would be wise to consistently, evaluate your circle of control. “When you are feeling hammered, and are struggling to keep yourself sane in the middle of your fast-growing business, it’s a good idea to take a step back and ask yourself, how much of that which you are contending with do you actually control?” (Dholakiya) 

DON’T GO BANKRUPT! How CPA & Management Accountants are Very Important for Start Ups

 

Think about a business that you want to start …

 

Now think about how you are going to start this business …

 

Alright, now think about what kind of work you will be getting yourself into if you started up a business all by yourself…

 

Fast forward 1 year… Imagine that you somehow survived a whole year of running this business and you managed to rack up enough money to pay off your expenses, awesome you broke even! BUT WAIT! Suddenly, you realize… you have kids to feed, you have bills to pay, you have to buy your mom a birthday gift because her birthday is in 2 days! And guess what?! Your money that you earned for the whole year from that business, has been used for the expenses of running your business!!

What does this mean?! Well, it looks like you’re gonna have to find other ways to get additional money.

You decide to make a note of yourself, I’ll try to increase my revenues next year so I can ACTUALLY PROFIT and have money to pay for all my lifestyle expenses.

But guess what? The following year passes, your business failed, you filed bankruptcy, your wife (or husband) left you with the kids, your mom didn’t call you back, sad life isn’t it? You’re probably wondering why your business failed… Well, it’s probably because you don’t have a CPA or Management Accountant to support your startup company!

In the article provided by Samantha White and Jack Hagel in the CGMA magazine (Issue 1- 2016), called “How Management Accountants can Support Start-Ups” explains how accountants and CFOs are very beneficial and important to the survivability to a startup business.

Entrepreneurs who start up their businesses ventured into the business world to bring in new innovative creations and services to themselves wherever they can. According to CGMA magazine, 36% of businesses fail within the first two years of operation (The owners probably went through the same rough situation as the above blog post).

 

SOME COMMON REASONS THESE BUSINESSES FAIL

–          Poorly thought out business plan

–          Running out of cash

–          Pricing and cost issues

The most common mistake that most startup businesses make is that they often go into the direction that will lead them to their inevitable doom to their company at a very quick rate. Additionally, they often do not realize that the direction they are heading need careful analysis.

 

SO… HOW ARE ACCOUNTANTS AND CPA FIRMS IMPORTANT?

Well, the answer is very obvious, you need someone who can manage your expenses, and let you know if your expenses will cause you to go into the direction of bankruptcy or not. Or, if you are currently stable, they can analyze your transactions and expenses and assess whether your business is heading into the profitable side or the bankruptcy side. With that information in your hands, you can decide what your next plan of action is for the company. Additionally, you will also have a CPA firm, or an accountant regulate your over expenditures and whatnot.

 

CGMA has spoke with several accountants with experience in startups. Here are some tips they have shared:

–          Understand that it’s a very different job

–          Be resilient

–          Believe in the business

–          Be curious and creative to find data and investors

–          Be adaptable to change

–          Know that many options and employment models are open to finance professionals

–          Know that the skills you gain will always be marketable – no matter the start-up’s fate

 

Overall, if you do not want to end up like the introduction of this blog, it would not be a bad idea to look into speaking with an accountant or reach out to a CPA firm. You never know how much more helpful they can be for your business. 

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