If the perceived outcome of a decision is likely to provide positive results and the worst-case scenario is acceptable to you, you may find it much easier to make your decisions. Thinking in this way could allow you to turn your decisions around much more efficiently which in turn will allow your business to grow at a faster pace. Remember, it’s less about pessimistically looking at your options and more about paying greater attention to all the potential repercussions. With proper analysis, you might find that the worst outcome is not as bad as was first expected.

Take another example of hiring a telemarketer to prospect for new business. The decision is whether or not to hire this person on a three month trial which will cost the business $4,000 per month.

In depth analysis acknowledges that the telemarketer will make a large number of calls and even if there is an element of luck rather than skills, some sales are bound to eventuate. An experienced business owner may use industry averages and their experience to derive the following worst-case scenario:

• The telemarketer will reach 60 leads each day and have a meaningful conversation with one third of these. This means that over the three months, 1,200 more companies will have heard about the business than otherwise would have.

• Of these 1,200 companies, 240 or 20% have agreed to be added to the database to receive future communications from the company. Each month through a newsletter or follow up phone call the business will have the opportunity to market its products and services to these 240 companies.

• During the course of the 3 months, 12 new customers have been added based on selling to just 1% of the people with whom the telemarketer had a conversation. At $965 per unit, this equates to revenue of $11,580.

For the experienced business owner who has knowledge or access to knowledge relating to their decision, the worst case is that they will make $11,580 in sales and add 240 new leads to the database at a total cost of $12,000 i.e. the total cost of the telemarketer over the three months. So whilst there will be a loss it is a marginal loss and the decision to employ a telemarketer would appear to be a good one. Especially if you consider the possibility of repeat business or converting more of those leads over the long-term.

If the business owner did not know industry averages or had little previous experience in telemarketing campaigns and consequently had no data to work with, he must accept that he may lose $12,000 over the 3 months.

It is up to the owner of the business to decide whether these results are worth the effort and risk. Making decisions is applying the knowledge, skills and experience you have to a given situation. Where there is a deficit of knowledge or experience it is the business owners duty to find others that can make up the shortfall. Making wrong or slow decisions and not making decisions at all can cripple a business very quickly. Seeking external advice from a business coach or consultant who has experience in the area is likely to assist in gaining objectivity and clarity therefore making your decision making a much smoother and less stressful process.



Summary of Key Points

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