How to Make Tough Financial Decisions that Benefit Your Business
Navigating the complexities of business finances requires fortitude and expertise. This article delves into critical decision-making strategies, bolstered by the wisdom of seasoned industry professionals. Discover the keys to making financial choices that position your business for success.
- Discontinue Unprofitable Product Line
- Choose Feasible Project Path
- Leave for Better Opportunity
- Reallocate Marketing Resources
- Adjust Rental Rates for Costs
Discontinue Unprofitable Product Line
I once had to discontinue a long-standing but unprofitable product line. Some employees and loyal customers were disappointed, but the financial strain was unsustainable. I communicated transparently, explaining the reasons and how it would allow us to invest in more promising areas. To ease the transition, we offered discounts on remaining stock and reassigned affected employees to new roles. Though difficult, the decision led to more substantial financial health and new growth opportunities. The key lesson? Tough choices require clear communication, empathy, and a long-term vision for success.
Choose Feasible Project Path
Good day!
One such example was early on in the development of VMeDx, where we needed to decide how to spend our resources between two exciting but still competing directions for our project. One pathway was favored within the team since it was closely aligned with their expertise, but the technical risks and long-term uncertainties were formidable. The other option had been much less popular at first due to the learning curve and adapting to new methodologies it presented; however, we concluded that it was both much more feasible and more aligned with our own company mission and vision. I weighed my options carefully and decided to choose the latter path. Although this decision faced some resistance in the beginning, it turned out to be the right decision, leading to a few milestones that massively accelerated our impact and opportunities in this domain. It confirmed how essential it is to shape choices rooted in strategic foresight, even in the face of narrow, prevalent consensus.
With a situation like this, it was a balance of clear communication, empathy, and data-driven decision making. I began transparently articulating the rationale supporting the decision and sharing a detailed assessment of the risks, the rewards, and why it aligned with VMeDx's long-term vision. To make all the team members feel valued, I invited them to open dialogue in which each and every team member expressed their emotions and opinions. Acknowledging their disappointment in the alternative plan losing, I made an effort to show them how their level of expertise could still be integral to the success of the path moving forward. Simultaneously, I made sure that the team had what they and I needed to get used to working in these new ways, building camaraderie and cohesiveness. Staying mission-driven, and fostering a culture of adaptability allowed us not just to overcome the challenge but to generate greater trust and help build the team's internal resilience to tackle future challenges.
Leave for Better Opportunity
One of the toughest decisions I had to make was during my time at different, when I decided to leave for an opportunity at Deloitte's Innovation & Ventures team. I was doing well at different, working with major brands like Audi and Zalando, but I knew the position at Deloitte aligned better with my long-term vision and could provide more value to future clients. I remember having to tell my team at different - it wasn't an easy conversation, especially since we were in the middle of some exciting projects.
The experience taught me a lot about transparent communication and staying true to your professional growth path, lessons I now apply at spectup when advising startup founders. Sometimes, what looks like a step sideways can actually be a step up, and that move to Deloitte ultimately gave me skills that help me better serve our clients at spectup today. Looking back, it reinforced something I tell our startup clients all the time - making unpopular decisions doesn't mean they're wrong, especially if they align with your long-term strategy and values.
Reallocate Marketing Resources
Hello, I'm Dennis Shirshikov. As an expert in education, marketing, and finance—with experience that spans from advising on real estate investments to teaching finance at the City University of New York—I bring a data-driven and innovative perspective to strategic decision-making.
Can you share an example of a time when you had to make a difficult decision that was in the best interests of the company, even if it wasn't popular with everyone? How did you handle the situation?
One instance that stands out occurred at Growthlimit.com when I decided to pivot our marketing strategy by reallocating resources from a long-standing, traditional campaign to a more innovative, data-centric approach that included experimental A/B testing and non-standard partnership channels. I conducted a thorough risk analysis—drawing upon my background in financial risk modeling—and held several candid discussions with team members to explain that while the change was unorthodox, the data pointed toward an opportunity for long-term gains. For example, rather than continuing with the familiar yet underperforming tactics, we shifted to leveraging emerging digital platforms and nurturing strategic partnerships, which at first met with skepticism from some quarters.
Best regards,
Dennis Shirshikov
Head of Growth and Engineering
Growthlimit.com
dennisshirshikov@growthlimit.com
Interview: 929-536-0604
LinkedIn: linkedin.com/in/dennis212
Adjust Rental Rates for Costs
One difficult but necessary decision we made was adjusting rental rates to account for rising operational costs, including property taxes and security upgrades. While this wasn't a popular move, it was essential to maintain the level of service and security our customers expect. We handled the situation by communicating transparently with tenants, explaining the reasons behind the increase, and highlighting our improvements, such as enhanced video surveillance and better facility maintenance. To ease the transition, we gave ample notice and offered incentives like discounts on longer-term leases to help offset the impact. While there was some initial pushback, most customers appreciated the open communication and our commitment to maintaining a high-quality facility. This approach enabled us to retain trust and minimize tenant turnover.
