Facing big choices can be daunting, especially when they involve your business’s finances.
Many of us have experienced ‘analysis paralysis’ when faced with a tricky decision. Overwhelmed with so much information and uncertainty that it is almost impossible to simply make a decision and act.
Luckily, there’s an easy way to help separate the financial facts from the fears. Using a simple, yet effective, pros and cons list is a timeless strategy that gives clarity to a major money issue. It can result in a decision that is objective and based on facts, not emotions.
How Does It Work?
A pros and cons list is straightforward to administer and steers you away from making an impulsive decision. It’s as uncomplicated as creating two columns and jotting down everything, both business and personal, that could be affected by your choice. If it’s a positive outcome, it goes in the “pros” column, if it’s an adverse result, it goes in the “cons.” Easy.
But it’s not just about counting the number of items that end up in each column. A way to make your list more business-savvy is to quantify each point – scoring them from zero to ten in terms of importance. This ensures major financial points have more significance than trivial ones. The total number of points in each column then provides a clearer view of what choice will be most beneficial for your business.
What are the Benefits?
Familiar and simple to use, a pros and cons list is a universally easy way to encourage deeper thinking and better quality decision making than simply discussing an idea. Making a definitive list allows you to look at each point individually instead of being overwhelmed by the decision as a whole.
A pro and cons list is particularly good during group decisions when each team member may have a different point of view or idea. It encourages everyone to see various angles and outcomes of a decision and other people’s perspectives.
What are the Drawbacks?
Pros and cons lists can tend to oversimplify complicated issues. The list forces each possible outcome into narrow frames of either ‘yes’ or ‘no’. This can lead to overconfidence as a decision-maker by ignoring the fact that many outcomes can be unpredictable.
Also, this method may not give an immediately clear answer. Negative statements can seem larger than they really are, or deal-breakers can get lost amongst other points. Organising factual statements is a great way to stay analytical, but sometimes you need to trust your gut or get some unbiased advice.
What else do I need to consider?
How do you make sure the decision you make is the best financial choice for your business?
Before you start assessing your pros and cons list it is important to have clarity on your values as a business and acknowledge your financial reality. Aligning your spending habits with what truly matters but not ignoring what your bank balance is telling you is the backbone of any successful financial decision.
Have in-depth discussions with co-owners and shareholders, talk through options with advisors, analyse possible outcomes thoroughly using the pros and cons list as a base, don’t ignore any gut feelings but do try to drown out any background noise.
Ultimately, no one knows your business better than you do.
A pros and cons list can be the perfect starting block to committing to a decision, but you might feel like you need a little more help.
Contact us today to book a discovery session with our professional team so we can help your decision making get with our expert unbiased advice. We are here to help make those choices a little easier.