Business Decision Making

In business, success comes to the people who get the big decisions right.

Making good decisions, however, isn’t easy. To make better business decisions, farmers need to:

• Have a clear vision for the future of their business
  
  
• Understand and consider the risks and uncertainty
  
  
• Acknowledge the non profit-maximising influences on their decision-making
  
  
• Understand that we all have prejudices and biases that impact decision-making
  
  
• Talk to the people who are affected by a decision and take into account their views
  
  
• Develop the skills to ask the right questions and gather and analyse enough relevant information to be confident about the decision
  
  
• Have processes in place to review and improve decisions

All decision making must be guided by a strong, clear direction for the business and family.

The attached 4 page fact sheet (pdf 140 kb), describes the key factors that need to be considered for making good decisions.

Key Points :

This fact sheet considers three key factors influencing business decision-making:

• Risk and uncertainty - farming involves the continual assessment and management of risk and uncertainty. Risk is the source of above average profits and losses.
  
  
• People issues - social considerations are often more influential on farmer decisionmaking than profit maximisation. This seems obvious, yet most discussions and tools still focus on profit factors.
  
  
• Access to information - complex decisionmaking is made easier by asking the right questions and analysing available information.

Considering how the different components of the farming system interact can be useful in understanding the impacts of decisions (see diagram on last page).

After you have done all the steps in this fact sheet don’t be afraid to listen to your “gut feeling”.

See Also :

Key decisions, critical actions and benchmarks - AWI website link