Business Management

Make Better Decisions




Decision-making is a crucial part of good business. The question then is ‘how is a good decision made? One part of the answer is good information, another part is experience in interpreting information.


Managers can be trained to make better decisions. They also need a supportive environment where they won’t be unfairly criticised for making wrong decisions. A climate of criticism and fear stifles risk-taking and creativity; managers will respond by ‘playing it safe’ to minimise the risk of criticism which diminishes the business’ effectiveness.
Decision-making increasingly happens at all levels of a business. The Board of Directors may make the strategic decisions about investment and direction of future growth. Managers may make the more tactical decisions about how they may contribute most effectively to the overall business objectives. But employees are increasingly expected to make decisions about the conduct of their own tasks and responses to customers. As a result careful recruitment and selection, good training, and enlightened management are important supports to good decision making.

How do you make the best possible decisions, knowing they will have an impact on your company's future?

There are strategies you can use to hone your decision-making skills.  Making better, faster decisions will help you take advantage of business opportunities.
1. Review the problem/decision in a broad context to include as many perspectives as possible. But don’t procrastinate just to get another opinion.

2. Make decisions as much as possible on facts rather than emotion. It is good to challenge your gut instincts; use objective data to reinforce decisions.

3. Don’t hesitate to challenge the status quo. Staying in your comfort zone in order to be comfortable may lead you on the same path. Change does not necessarily take more effort.

4. Be open to others opinion but trust your own ability and ability of employees to make a well-reasoned decision.

5. Recognize that some constraints may influence the decision; financial constraints, practicality, and lack of resources to implement the decision may influence the path taken.

Decisions are not taken in isolation and the effects of any decision will depend on reactions of others. Competitive behaviour should be anticipated and can influence choices. In the end, the review process needs to be completed with minimum delays and decisions finalized. Respect for action taken with a firm unwavering approach or allowing responsible employees to decide will earn respect from the organization.
I hope this helps improve your decision making in the business. Please let me know your thoughts.
gerry@polarisgroupmc.com

Business Valuation

Maximize your business value

If you’re seriously evaluating your exit strategy, managing the process through a professional may help. Having a third party involved to represent your firm often lends credence by serving as an indication that you're serious about selling.
Depending on your size, you may choose a business brokerage or an investment bank. Both help you accurately gauge market interest, bring potential buyers to the table and create a bidding process to get you the best offer.
In addition, such an intermediary will be able to guide you through the process – from signing a nondisclosure agreement (NDA) with a prospective buyer to help in structuring a transaction.
When preparing for sale here are some thoughts to consider for maximizing the value of your business.
1. Get Your Books in Order: Financial statements are the best indicator of the future performance of a business. Buyers evaluating your company will generally require at least three years' worth of financial information. The more formal your statements (accountant-reviewed or -prepared vs. internally generated), the better the impression you'll make and the easier the due diligence for a buyer. Audited financial statements are ideal. Having a top-notch business plan to accompany your financials will increase your credibility with potential buyers.

2. Grow Your Business to Sell It: It is always easier to sell a business whose sales are growing than one in a downward trend or even flat. Buyers generally want to invest in a company that will provide them with a good return, so they’re willing to pay more for a business that has a positive trend and outlook.

3. Valuing Your Business – Taking Intangible Assets Into Account: When pricing your business for sale, intangible assets – such as people, knowledge and market position – can be even more important than tangible property. Customer awareness that underpins a prominent position within the market is a key ingredient in many companies’ success. A strong brand and a loyal customer base can be distinct assets. Other distinct intangible assets include copyrights or trademarks that let a business sell its products for a higher price or in greater quantity than its competition

4. Get a Business Valuation: A professional valuation will give you a basis for gauging offers. It will give you an idea of what you can expect to net from the sale. It will also tell you your company's market position, financial situation, strengths and weaknesses (which you can address prior to putting it on the market). Valuations can be obtained from a number of sources, ranging from local accounting firms to business brokers and investment banking firms. In this area, Capital Assist (Valuation) Inc, headed by Federica Nazzani is an excellent option.

5. Concentrate on Core Competency: A company with a strong focus around a core business generally tends to be more appealing to a buyer than a company going many different directions. Make sure that the focus of all members of the management team is aligned in this direction and that your firm’s products and services add to the value of your core business.

6. Plan for Management Succession: If you're absolutely vital to your business, who will a buyer be able to turn to for help running things after you leave? Efforts should be made to gradually delegate key responsibilities to various members of the senior management team. A buyer's primary concern is that the business can operate successfully in the absence of the current executive.
In addition, review your incorporation papers, permits and licensing agreements. Make a good first impression. Insure that when prospective buyers visit, they see an orderly operation instead of one that is chaotic. And no matter what, keep your eye on the ball. Don't let your business performance decline because you're too focused on the sale. This will only give buyers additional negotiating power to lower their offers.

I hope these tips support your efforts to maximize your business value.