A good business owner needs all sorts of different qualities but one of the most important ones is decision making. It falls to you to make the hard calls about the future of the company or how to deal with any crisis that may arise. If you don’t have that skill, you aren’t going to get far. Some new business owners aren’t prepared for the kinds of decisions that they’re going to have to make and they run into trouble when difficult situations arise. To help you avoid that, these are some of the hardest decisions you’ll have to make in your first year as a business owner and how you should tackle them.
Renting Office Space
When you first start out, you’re likely to be operating out of your home by yourself. But when you start to grow a little, that just isn’t going to work anymore and you’ll need to start bringing in some employees. Those employees are going to need somewhere to work so you’ll also have to hire an office space. Finding the right space for your company is a lot harder than you think. Price is important, of course, but you also need a space that fulfils your requirements and maximises efficiency. Start by drawing up a list of things that you need in the office and then take it to commercial property agents. They’ll be able to give you a good indication of how much it will cost to meet those requirements. Then you can decide whether you can afford it or not, and look at what your priorities are so you can start drawing up a realistic budget. Often, you’ll have to make sacrifices so think about what is essential and what isn’t and then go back to the property agents with the revised list. Once you’ve found a space that suits you, always negotiate on the price and see if you can get it cheaper, and make sure that the rent will be fixed for a few years at least, otherwise, you’ll be caught out by price hikes.
Expanding The Business
You’ve already expanded into an office, things are going well and you’re starting to consider whether you should expand again. Should you do it or not? When you expand your overheads will shoot up, which is fine if you’re bringing in the extra revenue to cover it. If you aren’t you’re going to run into trouble. The best thing to do is wait until customer demand is quite a bit higher than what you can deliver. Also, don’t jump the gun because you’ve seen a spike in sales for a month or two, wait until that increase is sustained over a couple of months.
This is the worst decision that you’ll have to make in your career as a business owner but somebody has to do it. If you’ve got an employee that isn’t performing properly or is causing problems around the office, it might be time to let them go. However, you should always see firing people as a last resort. Before you do that, call them into the office and discuss your issues with them. Then give them a chance to explain themselves and do something about it. If things still don’t change, then you will have to let them go.
These are the hardest decisions you’ll have to make in your first year as a business owner, but if you can get them right, you’ll be far more likely to succeed.
Photo by Brendan Church