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.

It’s who you know that really counts

Successful businesses are glued together by their advisors. Unless you have some divine ability to know everything there is to know in your industry, I strongly recommend that you compile a list of experts and key contacts and nurture them.

It is more often than not the advisors, negotiators and analysts that put the “big” in front of a company’s name. The best available advice is a key ingredient to become a big business. On you way to the top you might not have all the answers. Make sure you know people who know the answers, and secure your way to the top.

Surround yourself with smart people. They have the knowledge that will enable and empower you to become successful. Advice isn’t always cheap, but good advice is priceless. It’s who you know that really counts.

The only thing that might keep you from becoming a star is arrogance and pride. When was the last time you made a good decision without advice from a friend, family member or loved one?

So… sit down, shut up and listen.