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Guide to making good business decisions

Adversity becomes an opportunity for growth if good business decisions are made.

This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process. Opinions expressed by Entrepreneur contributors are their own.

The business world is a highly competitive field, even more so in a context as globalized as ours. That is why making the right decisions will allow our business or company to stand out from the rest, since it provides a competitive advantage, whatever the economic activity to which it belongs.

Lubo Minar vía Unsplash

Entrepreneurs who have known how to make good decisions when they had to (no matter how difficult these may have seemed), have managed to have successful businesses that survive economic crises, and in some cases, have become large multinational companies . Adversity becomes an opportunity for growth if good business decisions are made.

Here are some tips that have helped me and can guide you when making these kinds of decisions:

Information is essential

Image: Matthew Guay via Unsplash

Every decision, especially in the field of business, must be based on reliable and verifiable information. Although we can certainly have intuition or a great idea to create a new business or launch a new product, in order to achieve this, it is essential to rely on market information provided by many specialized sources.

In the Building Billionaires episode of the Decision Making Hackers and Painters podcast and essay series, author Paul Graham explains that in order to start a business it is necessary to fully know and understand the customers of the product or service offered. Graham also cautions that you need to have a thorough understanding of the needs of potential clients.

Also, Graham says, “It is absolutely necessary to know the strengths and weaknesses of your competition . A business not only exists in the market, but is immersed in a system in which various companies that offer comparable products or services participate. Therefore, it is necessary to know this system well in order to make the right decisions ”.

Adaptation and resilience

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How many businesses (particularly family businesses) continue to do the same old things because they have always done it that way? Market conditions are constantly changing. What may have been the right decision several years ago may turn out to be the worst way to do things today. Consumers have new expectations, tastes and preferences. Credit interest rates vary. The purchasing power of people changes. If a business is unable to understand and change in the face of a new reality, it cannot be successful.

Resilience is the ability to adapt to an adverse state or situation. However, this does not mean that we get carried away by changing market conditions. We must be aware of our potential and limits at all times to determine how our business can react to such conditions.

Calculated risks

Image: Loic Leray via Unsplash

To be able to adapt to change without the business failing and to be able to make good decisions, you have to be willing to take risks. However, at all times you should know to what extent you are willing to risk. If things do not work out as you have planned in the given time, it is better to go back to your original plans, always being very clear about the limits and scope of your business .

Creativity and innovation

Imagination: Dragos Gontariu via Unsplash

In the same series of essays, Paul Graham explains that for a business to be successful you must do or offer something that people want or need, and do not yet have. If you offer the same as others, you will be able to sell it, but you will never be able to create what Graham calls a “huge market” for your company.

In order to make decisions about the creation of new products or services in your business, you must be creative and innovative. Think of new ways to get customers what they want that doesn't exist yet. The great visionary entrepreneurs began that way. Graham explains that Steve Jobs and Steve Wozniak started making personal computers at a time when few people really knew what they could use them for. You just have to see how far that innovative vision that they had more than 40 years ago has come.