When I asked our email subscribers, “What is your biggest business struggle?” an overwhelming number of people responded with a struggle centered around focus. “I'm not sure where to focus my time in 2016.” “What should I do next to grow my business?” “I have so many ideas but I don't know which one to pursue.”
It all came down to finding that next step to take that would expand their business.
As entrepreneurs, we know that there are thousands of ways to succeed in business, but that is kind of the problem, right? Which idea, path or product is the best one?
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Enter the Decision Matrix
No one can answer that question for you (and don't believe them if they say they can!), but I'm going to show you a tool we have used to help us find focus in our business. It's called a Decision Matrix.
I first learned of a Decision Matrix from the book The $100 Startup by Chris Guillebeau (a book I highly recommend). We used his Decision Matrix concept and tweaked it a bit for our own needs.
How Does it Work?
Let's say you are a blogger looking for your next big project to pursue in your business. You have several ideas, but you have no idea which one to pursue. Begin by listing your ideas straight down a page. Now we need some way to evaluate these ideas. What criteria are important to you? List them at the top of the page.
Here are some ideas on criteria that might be important to you:
Effectiveness – How effective will this project be in accomplishing your overall business goals?
Impact – What impact will this idea have on your business and customers?
Time – How much time will this project take you? (For this criteria lots of time gets a low score and a little time gets a high score.)
Profit – Will this idea produce a lot of profit or just a little?
Fit – Does this project fit well with your current business model and customer base? Does it align with your business mission?
Cost – How expensive will this project be to get off the ground? (The lowest cost ideas get the highest rating.)
Learning Curve – Does this idea require you to branch off into new territory and learn things from scratch? (This could be good or bad depending on how you see it!)
Customer Requests – How well does this project meet the needs your customers have already expressed to you?
Timing – Does the current timing mesh well with this idea? (For instance, it doesn't make sense to launch a Back to School product in February.)
Passion – How much passion do you have for the idea? (You may need passion to keep on going!)
You do not need to factor in all of these criteria in your decision matrix, and I'm sure you have criteria of your own that are important to you. Select a handful of criterion and write them across the top of your page.
Keep in mind that you must place equal importance on the criteria you select, otherwise the results of your Decision Matrix will be skewed.
Now, go column by column and rate each idea based on each criterion. I recommend going down the page, ranking each idea against one criterion so that you develop a more uniform scaling system for each criterion.
Use a scale of 1 to 5 with 5 being that the idea fits the criterion perfectly and 1 meaning that the idea is a miserable fit. Once you have ranked every idea by each criterion, add up the score of each idea, and the highest scored idea should be the best idea. Remember you are ranking each idea against the criterion, not against each other, therefore two ideas can receive the same rating.
So in this example, we ranked big project ideas. Based upon this blogger's results, she would probably start with creating a printables packet to sell, but since writing an ebook was a close second, either one would probably be a great choice.
A Decision Matrix can also be used to rank business growth ideas. Here is an example of that for a blogger.
This blogger's decision matrix has really digging into Pinterest ranked the highest, followed by an Email Responder and Guest Posting as close seconds. Once she masters Pinterest she might decide to redo her decision matrix or pursue guest posting and an email autoresponder simultaneously.
Ways to Use Decision Matrixes
Create multiple Decision Matrixes for each facet of your business you hope to grow. In our examples, we created one matrix for our next big project and one for ways to grow the blog. If we would have combined the two, our results would have been skewed, because each of those areas of the business is separate. Most bloggers are simultaneously working on both a big project and growth in general, so two separate matrixes were required.
Once you have completed a big project, created a new product, or mastered a new traffic generating idea, you may need to revisit your decision matrix. As time passes, things change quickly! Creating a new decision matrix from scratch may help you re-evaluate choices in light of changing circumstances or results of a big project completed.
Our examples were for bloggers, but Etsy sellers can use the same idea when deciding on new products to add to their shop or wondering how they should focus their efforts on increasing sales.
A Decision Matrix can also be used to decide what type of business to start. So if you are a woman who knows you want to start a business, but you're not sure what type, listen to Episode 7 to start generating ideas, write them all down, and then use a Decision Matrix to determine which business is the right fit for you! (And also read The $100 Startup because it's full of ideas on different types of businesses!)
Keep in mind that a Decision Matrix is a tool, not your brain! There is no rule that you must follow the results of your Decision Matrix without a thought!
So what will you decide to do next? Let us know!
P.S. If your Decision Matrix tells you to start a blog this year, we recommend the course Framework to get you started!