Making Better Business Decisions as an SME Owner

Owners make dozens of decisions a week, and most of them are fine. The ones that hurt share a pattern: the question was never written down, only one option was on the table, and a choice that could not be undone was made at the same speed as one that could. This article sets out a short routine, in five steps, that corrects those three faults without slowing you down.

Three faults behind most bad calls

Look back at a decision you regret and you will usually find one of these:

• The wrong question. “Should we buy a second machine?” when the real question was “How do we add capacity for the next year with the least fixed commitment?”
• A single option. A supplier, landlord or salesperson presented one path, and the only choice was yes or no.
• One speed for everything. A three-year lease and a change to the lunch menu were both decided in an afternoon, or both dragged on for months.

The routine below takes each fault in turn.

Step 1: Write the decision as one sentence

Before you gather information, write the decision in a single sentence with a deadline: “By 30 November, decide whether to [action], given [constraint].” Then split what you know into two lists: facts you can check, and judgements you have to make.

Facts have a source. In Malaysia the minimum monthly wage has been RM1,700 for all employers since 1 August 2025, and since 1 February 2025 for those with five or more staff, under the Minimum Wages Order 2024. That is not something to debate in a meeting; look it up. Whether a new hire will pay for herself within six months is a judgement, and that is where your meeting time should go.

A small manufacturer in Shah Alam used this step on a RM380,000 machine purchase. Reframed as “add about 30% capacity for the next twelve months at the lowest fixed commitment”, the decision had four answers rather than one: buy, lease, run a second shift, or subcontract the overflow. The owner chose a second shift for six months with a review date, and bought the machine a year later with a confirmed order book behind it.

Step 2: Never decide between one option and nothing

A choice between “yes” and “no” is not a choice; it is a negotiation with yourself. Insist on at least three live options, and make one of them “do nothing for 90 days and collect better information”. If you cannot think of a third option, ask your accountant, a supplier or a peer in another industry for one. Outsiders see the obvious alternative you have stopped noticing.

Step 3: Sort decisions by how easily they can be undone

Jeff Bezos put this plainly in Amazon’s 2015 letter to shareholders: some decisions are “one-way doors”, consequential and nearly irreversible, and these deserve slow, careful deliberation. Most are “two-way doors” that can be reversed, and these “can and should be made quickly”. The expensive habit is applying the slow process to everything, which he noted leads to slowness and too little experimentation.

For an SME the sorting looks like this:

Hiring sits in the one-way column for a reason. Since 1 January 2023 the amended Employment Act 1955 applies to all employees regardless of wages, with a 45-hour working week, 98 days of maternity leave and seven days of paternity leave, while certain overtime and termination benefit provisions apply only to those earning RM4,000 a month or less. Letting a permanent employee go is slower and costlier than most owners expect, so the decision to hire deserves the slow lane even when the salary looks small.

Step 4: Run a 30-minute pre-mortem on every one-way door

A pre-mortem is a technique described by research psychologist Gary Klein in Harvard Business Review in 2007. You assume the decision has already been made and, twelve months on, has failed badly. Everyone in the room then writes down, in silence, every reason they can think of for the failure. Imagining the failure as already real, rather than merely possible, makes people better at spotting what could go wrong, and it gives junior staff permission to raise doubts that would otherwise sound disloyal.

Run it like this:

1. State the decision and say: “It is October next year and this has been a disaster. Why?”
2. Three minutes of silent writing. No discussion.
3. Go round the room; each person reads one reason until the lists are empty.
4. Pick the three most likely reasons and decide what you will change, or which early warning sign you will watch for.

A tuition centre owner in Subang Jaya ran a pre-mortem on opening a second branch. The list included: the lead Additional Mathematics teacher leaves and takes students with her, enrolment falls every December, and parents cannot park. Two of the three were fixable before signing anything: a retention bonus tied to the branch’s first year, and a cash plan that treated December as a zero-revenue month.

Step 5: Know when to bring in outside eyes

Not every decision needs an adviser. Use these triggers:

• The downside is more than three months of your net profit.
• The decision is a one-way door and you have been stuck on it for more than two weeks.
• It touches law or regulation. For example, an employee’s written request for flexible working must be answered in writing within 60 days under the amended Employment Act. That is a fact to check, not an opinion to form.
• Everyone you have asked so far depends on you for their income.

The last trigger matters most. Staff, suppliers and family all have a stake in pleasing you. An accountant, a lawyer, an industry peer or an adviser with no stake in the outcome will tell you the thing nobody else will.

Worked example: two drivers for eight months

A logistics subcontractor in Klang with six drivers is offered a contract worth RM38,000 a month for eight months. It needs two more drivers from the first week. The figures are illustrative.

Framing: “By Friday, decide how to supply two extra drivers for eight months without carrying fixed cost after the contract ends.”

Options: hire two permanent drivers at roughly RM3,200 a month each including statutory contributions, about RM6,400 a month in total; subcontract the extra runs to a smaller operator at about RM9,500 a month; hire on fixed-term contracts matched to the eight months; or decline.

Reversibility: permanent hiring is the one-way door. If the contract is not renewed, the business carries RM6,400 a month of wages with no work behind them. Subcontracting costs RM3,100 a month more, RM24,800 over the contract, but can be stopped with a month’s notice.

Pre-mortem: the failure that worried the owner most was not cost but service. A subcontractor’s driver missing a delivery window would put the whole RM38,000 contract at risk. So the plan changed: subcontract for the first three months with a daily check-in, and move to fixed-term hires if the client confirms renewal by month four.

The decision took two days. The expensive version was avoided, and the cheaper version was protected against its main weakness.

Common mistakes

• Gathering more information when the real problem is that no decision has been framed.
• Treating a supplier’s deadline as your deadline.
• Running a pre-mortem and then changing nothing.
• Asking for outside input only after the contract is signed.

Key takeaways

• Write every significant decision as one sentence with a deadline, and separate the facts you can check from the judgements you must make.
• Insist on at least three live options, one of which is “do nothing for 90 days and collect better information”.
• Decide two-way doors quickly with a review date. Give one-way doors, such as a three-year lease, a first permanent hire or a loan secured on your home, the full routine.
• Run a 30-minute pre-mortem on every one-way door and change something as a result.
• Bring in an adviser with no stake in the outcome when the downside exceeds three months of net profit or you have been stuck for more than two weeks.

How Gusto Style can help

The Advisory Retainer (3 Months) gives you a standing adviser for a fixed price: a monthly working session to frame the decisions in front of you, a pre-mortem on anything that cannot be undone, and someone with no stake in the outcome to call between sessions. Owners use it most during a stretch of one-way doors, such as a new branch, a first permanent hire or a new bank facility.