Starting up and running a business is no easy job, and it requires decisive, timely, cautious and risky decision making, balance and so much more action even to get it off the ground and running smoothly. Owning a business is risky, and one wrong decision could be the breaking point for your business to either get better or get wrecked. That said, there are quite common situations that require business owners, despite the nature of the business, that needs decisive and firm decision making on the owner’s part. Here are some tough business choices the owners must make.
1. Hiring choices
When starting a new business, it is highly likely that you are going to need some help running the day to day activities, and that requires a workforce. It could be one person or several people, but picking out employees requires careful consideration because those decisions are lasting and can affect the outcome of your business. For instance, as an owner, you need to consider whether you should hire someone with experience or a newbie with proper qualifications, how much you are willing to pay the employees, and so on.
2. Loans or investors
Another major choice regarding business that astounds many business owners is the source of funding for the business operations. One can choose to take the bank route and borrow money, personal or business loan, and hope that once the business takes off, they will be able to repay said loans using the profits. The other option to go is partnering up with other people who invest in your business and get a percentage of the earnings; this one requires business owners to cede some level of control over the company to the investors who have a stake in the endeavor. One can also choose to use their own money if they have saved enough to start the business.
3. Allocating resources
Resources are scarce, and running a business is all about utilizing said limited resources to fill a gap or fulfill a need and make a profit. There are many aspects to a company such as advertising, marketing, sales, customer management and so forth, and a business owner needs to make the choices on how the resources available to him will be applied to each sector. It’s virtually impossible to get the equal balance for all of them, and the owner needs to decide which ones take priority and the ones that can take a back seat without necessarily tanking the business. This requires a lot of thought because the wrong choice could be detrimental.
4. Firing employees
Employees are a significant aspect of a business; they take care of operations from day to day, and the relationship between the employer and the employee is essential. As a business owner, you have to make personal choices, like letting some people go for under-performance despite them being the longest-serving or close friends.
5. Strategic and operational decisions
A strategy is a long-term choice the business owner makes to ensure the business is going to be profitable, such choices as mergers or acquisitions, research and development for new products and services and so on. Operationally, not only does the owner have to come up with a plan on how to run their business on a daily basis but also choosing the right partners regarding distribution and supply, marketing of your products and your target customers.
These decisions are hard on a business owner and can be the difference between success and failure in a business. It is, however, important to understand that often being the owner means you might have to deal with more responsibility; but if you succeed you will be proud of everything you had done.