If the risk is likely to be fatal, forget it

Whenever you need to make an important decision assign a risk factor to it. If the risk is high, the consequences fatal, and it is likely to happen, forget about it.

Everything has a life cycle. Nothing lasts forever, but some things last longer than others. There are various decision-making models you can use to help you make better business decisions. There is a quick and simple way to determine of something is a good or bad idea. Simply ask yourself if this will make sense in the long term. Will this be viable 12 months down the line?

Most businessmen who run large corporations will tell you to try before you buy. First stick a toe in the water before you jump in. The key component with regards to making decisions is to think about the consequences of your decisions.

The figures look great, the plan is in full colour on gloss paper, everyone is dressed in top-dollar suits, but your gut tells you something is not adding up. Trust your gut. Don’t make decisions while you are under pressure. The Chinese have a saying: “Never make a decision on an empty stomach”. Trust me, it is always the things that you didn’t think through properly that cause the most damage. Trust your instinct, it is usually right.

Don’t get sold on the prospect of potential revenue. It takes money to make money. I strongly advise you to study the long-term cost implications of the decision you have to make. Your intentions might be good, but your decision could yield large costs instead of profit over the long term.