4 Truths to Making Difficult Business Decisions

Many successful business owners will tell you that the biggest obstacles they face in the day to day business operations is their own emotions, which they sometimes need to ignore when it comes to work. When big decisions need to be made, we can look to 4 simple truths to help guide us in making the right call.

Let’s start by playing a situation through. Consider a business owner that is approached by their financial expert, letting them know that they have to cut half of their workers loose in order to meet expenses. On one hand, the business owner must consider that many of the workers are loyal to the company and are very productive. On the other hand, the company needs to be able to run leaner in order to make ends meet.

Simply based on the emotions of keeping the business operating, the solution may seem obvious in cutting half the workforce. However, before making that call, the owner needs to look at all the facts – and not just the financial ones.

Questions need to be asked:

  • how long will this lack of income last?
  • if we layoff employees, how much will be spent on unemployment compensation?
  • what other ways can we cut expenses?
  • if half the workforce is let go, what will be the effect on productivity and customer service and will the remaining employees be able to handle everything without the additional help?

If after thoroughly understanding all of the available options it is found that half will need to be let go, then it is the right decision for everyone.

Decisions Must Be Based on How the Outcome Will Affect Everyone Involved
Sure, it is a tough decision, but one of the responsibilities of a business owner is being able to make the tough calls, knowing it is the right one for the business as well as for the remaining workers. Unfortunately, there is no hard and fast rule about which employees will need to go away. Seniority may be the deciding factor, but some businesses use productivity instead.

A new hire may produce as much or more as an employee with several years of experience. Owners should never look at payroll as a deciding factor; getting rid of some of the higher paid, long-term employees also means getting rid of loyalty as well as experience.

The decision should be based on who can offer the most to the business, and it should be a decision based on facts rather than the emotions of who needs the job more. From a cold fact point of view, if the worker needs the job that badly, then they have probably consistently been a hard working, productive asset to the company.

Keep the following truths in mind when you are forced to make a difficult decision as a business owner:

There is No Universally Correct Answer
In these tough situations, any decision that you make will have its drawbacks. You just need to make the best decision for your business based in the information that is available to you.

Sometimes Problems Work Themselves Out
Don’t make any big moves until it is absolutely necessary as a solution to your problem may simply appear. However, when it is time to make a decision, don’t hesitate to do what needs to be done.

Most People Are Understanding
Everyone knows that it’s not easy to be a small business owner and that sometimes you have to tread water just to survive. If your employees perceive that you are being fair and sincere in your dealings with them, they will probably understand if you need to cut their hours or eliminate their position. Even if they don’t, as long as you treat them with respect and are doing what’s best for your business, it’s all that they can reasonably expect from you.

It is Better Not to Second Guess Yourself
Don’t waver when making a difficult decision. Determine the best solution and move on. Revisiting your decision and wondering if you made the right choice is stressful and it’s a waste of time. Instead, accept the consequences of your decision and learn from them for next time. 


Even though you’re dedicated to your business, you are still a person – so it’s natural to feel badly when your decisions negatively affect others. No matter how difficult things get, don’t allow the stress of your business to erode the compassion that you have for your employees. As a business owner, your ability and willingness to make tough decisions is necessary for your survival. It is easier to bury your head in the sand, but avoidance won’t get you very far. All successful business owners have made a difficult decision at some point in their journey.