6 Key Decision-Making Techniques for Managers

A business owner’s ability to make smart, strategic decisions has a significant impact on long-term success. If you lead a team or run a firm, mastering these 6 key decision-making techniques for managers will save you time and money.

Making good decisions starts with the right tools and information, and when you’re using Small Business Administration (SBA) funding to fuel growth, your choices matter even more.

1. Analyze Your Business

Analyzing your strengths, weaknesses, opportunities, and threats (SWOT) is an accessible and strategic tool that helps you evaluate your internal capabilities and market position.

Before applying for an SBA loan, a SWOT analysis can help identify:

What you are doing well
What could be improved
Where your market is heading
What is holding you back

Managers can use this method to make key decisions about whether a new product line, team hire, or marketing spend fits into the business plan.

2. ROI Forecasting

Before you invest SBA capital, you should forecast your Return on Investment (ROI). It is helpful to know how soon your investment will yield a return and how it will impact your cash flow.

For example, if you want to use your SBA loan to hire a sales manager, consider the annual cost of the role, how much new business they need to win to make hiring worthwhile, and how quickly you need that growth to occur.

This key managerial decision-making technique is all about timing and expectation. If the timeline to ROI is too long, it may not be a wise choice.

3. Scenario Planning

Scenario planning helps you prepare for multiple outcomes. For example, what happens if demand for your goods or services doubles? What if you lose a supplier? What if a marketing campaign is unsuccessful?

When considering an SBA loan, this skill is key to making informed management decisions. It helps you to prepare for the best- and worst-case financial outcomes, avoid overextending or overhiring, and adjust your strategy quickly if necessary.

We have seen businesses grow too quickly, only to struggle later and be unable to repay their loan. When this happens, it is not because the idea was bad, but because the business needed a solid plan to back the execution.

4. What Is a Break-Even Analysis?

Break-even is the point at which your investment starts to generate enough revenue to cover its costs. Before borrowing, it is a good idea to conduct an analysis of how many units you need to sell, how many clients you need to win, and how many months it will take to cover your costs.

This technique prevents managers from making key decisions based on optimistic projections without an informed reality check.

5. Consult With Financial Experts Before Borrowing

The SBA has very specific guidelines about how business use their loans. For example, you can use it as working capital, but not for certain types of passive investments or refinancing. Even if you are a skilled business manager, it is wise to consult a loan packaging firm that understands the rules.

At Business Funding Group LLC (BFG), we are experts in SBA financing. We will help you and your managers use these key decision-making techniques and guide you through the loan application process.

6. Look at Debt Terms, Not Just Loan Size

Managers sometimes worry about the size of the SBA loan, but the loan amount is just one factor to consider. Your monthly repayment, interest rate, and loan term all affect whether the decision makes sense.

When evaluating funding, consider the total cost of the loan over time, its impact on monthly cash flow, and the duration of the debt. A good method of making the decision is to consider whether you and your managers can use the money wisely and manage the repayment responsibly.

Call BFG To Help You With Key Management Decision-Making Skills

Your decisions shape the future of your business. The difference between good growth and risky debt is often just a matter of careful planning.

If you are considering an SBA loan, let us help you apply these 6 key decision-making techniques for managers to your funding strategy. We can guide you through the entire process and help ensure your decisions today set you up for success tomorrow.