The Entrepreneur Insider network is an online community where the most thoughtful and influential people in America’s startup scene contribute answers to timely questions about entrepreneurship and careers. Today’s answer to the question “When making a tough business decision, how do you know when to trust your gut?” is written by Suneera Madhani, founder and CEO of Fattmerchant.
Although being the CEO/founder of a rapidly growing company may be every entrepreneur’s dream, it comes with an immense amount of responsibility. Every day, you are responsible for dozens of decisions that directly impact your business, customers, employees, and investors, so it’s important that each decision is made for the greater good. Every leader has his or her own winning formula when it comes to making the best decision for his or her business, and for me, that winning formula is facts plus gut.
Whenever I’m faced with a decision, I first try to remove emotion and approach the situation extremely analytically and strategically. This way, I’m able to lay all of the facts in front of me and get a full picture of the situation. After finding and understanding all of the facts, I put together the classic pro-con list. Pro-con lists help me fully understand what the outcome of every decision could be and which could be best for the company. It is only after I have all of the facts and a solid understanding of the pros and cons that I then allow my gut to enter the equation.
I can analyze and quantify decisions all day long, but at the end of the day, I trust my gut to make the majority of the decisions I’m faced with. The facts can all point me in one direction, but if my gut is telling me to go the other way, there’s probably a good reason. As an entrepreneur, you know your business better than anyone, and a list of facts can’t always direct you to the best decision. If my gut is pulling me in a specific direction, I take the time to ask myself why that might be. What does my gut know that I don’t? By taking the time to understand my gut instincts and comparing them with the facts in front of me, I am able to make decisions that best benefit the company as a whole. More often than not, though, the facts end up validating what my gut knew all along.
Although I typically swear by my gut-plus-facts approach to decisions, there are certain times where it is necessary to just use one. For example, when I left my 9-to-5 job to start Fattmerchant, I left on a pure gut feeling. I had zero facts that the company would succeed, but it was built on customer analysis and customer demands—hence the validation of my gut. Raising almost $1 million in venture capital, on the other hand, was by no means a gut decision. That was a decision based entirely on analytics and tireless research into whether or not Fattmerchant was ready to scale. However, my gut agreed with the facts and I knew that it was the right decision for the company.
As an entrepreneur, you will constantly be faced with decisions that will ultimately impact the success of your business. By having a decision-making process that you can trust, you will be able to make the best decisions possible for your business. For me, that process is to trust my gut, but to balance it with the facts and solid analysis. In all of my experiences, facts + gut = the best possible business decision.
Read all responses to the Entrepreneur Insider question: When making a tough business decision, how do you know when to trust your gut?
Here’s What You Should Do When You Have to Make a Tough Decision by Alexander Goldstein, founder and CEO of Eligo Energy.
Never Make a Big Decision Without Doing This First by Feris Rifai, cofounder and CEO of Bay Dynamics.
Here’s How Questioning Decisions Can Ruin a Business by Pat Peterson, founder and CEO of Agari.