Our thoughts on how your state of mind and your general disposition will impact the quality of the decisions you make.
In an earlier post, we touched on the impact of psychology as a primary component of business decision making. As human beings we tend to “think our way” into feeling good about the decisions we make. At least that is what our own experience tells us.
When we are helping our clients make a facilities decision, we are careful to supply all the specifications on available buildings, information on market trends and all relevant historical data that will help us structure the transaction to their full advantage.
The value of these facts and figures are indisputable, but they have to add up to a good feeling in the client’s mind before they will actually make the decision to move forward. Yes, all the math gets done, all the facts are verified and all the choices are fully vetted, but all those things are what lead up to having the right ‘feeling’ about what to do.
This may not come as a revelation to you, but we still think it is important to bring it to your attention because we believe that your overall state of mind as a business owner or investor will drive your daily decision making.
With the foregoing in mind, we came up with a simple model to help us understand your state of mind as you approach a real estate decision. It looks like this:
What we mean here is that every business owner’s psychology is somewhere on a continuum that is bold and aggressive on one end, wary and protective on the other end and wait-and-see in between.
Your own state of mind is probably influenced by a long list of things, some of which are issues directly related to your current business situation and others that are more personal. The key to good decision making is to be keenly aware of where you are on the continuum and what moves you in one direction or the other.
Let’s take a look at an example:
- If your revenues are consistently on the rise and your customer base is expanding, you are more likely to go on offense and consider taking more space, adding a second location or hiring more employees.
- However, if that growth pattern is just a few months old, you may take a more neutral stance and look for ways to become more efficient to fill those new orders from your current location and wait to see if the growth trend continues before deciding to expand.
- Conversely, if a new competitor has come on the scene who is undercutting you on price, you may take a more defensive posture by laying off employees to reduce your costs or cutting into your profits by lowering your own prices.
Each of these scenarios impacts the psychology that lies behind what you will decide to do.
We can provide you all the information you need to make an informed decision, but your state of mind will determine what you actually choose to do.
The more conscious you are about this whole process, the better your everyday business decisions will be, including the one you make about your facility every 3 to 5 years. More on this topic soon.