Call it instinct, intuition or just a hunch — all smart small business owners know what it's like when something simply feels right (or wrong). Making a move based on this sixth sense may not seem wise at the time, but as any successful entrepreneur can tell you, the best business decisions aren't always based on logical analysis. Paying attention to your hunches may give you an uncanny ability to dodge a bullet or grab the brass ring and make more happen. Here are three times you need to trust your gut.
When the Whole Package Matters More Than What's on Paper
Doug Fleener, an independent retailer, industry consultant and blogger, writes about how he's made many astoundingly successful hiring decisions that seem to fly in the face of reason. His secret, according to a post he wrote on Retail Contrarian, is not judging a book by its cover — or a job candidate by her cover letter. Instead of simply writing people off based on an apparently weak r?sum?, Fleener recommends a face-to-face meeting as the best way to really understand what each prospective employee has to offer: "I can learn more in the first two or three minutes of a conversation with someone than from 30 minutes reading a r?sum?. I don't care where the person has worked if he or she is smiling, energetic and interested in the products my store sells."
This doesn't mean you should throw caution to the wind — using pre-employment assessments, background checks and behavioral interviews is still important for small business owners. But knowing who will be a good match for your company's culture isn't something you can figure out with a checklist. A face-to-face meeting is essential to really knowing if someone is the right fit for your business.
When You Can't Put Your Finger on What's Bugging You
Knowing when to turn down an apparently great proposition, such as a partnership or new product idea, is critical if you plan to stay in business for the long run. If the thought of pulling the trigger on a business deal makes you queasy, take a big step back. Examine the fears or underlying prejudices that might be clouding your judgment.
If you still can't identify the underlying cause of your hesitation, do the smart thing and walk away. That nagging feeling in the pit of your stomach is a good indicator that you've picked up on a warning sign that simply hasn't reached your conscious awareness. Remember, it's annoying when other people say, "I told you so" — but when you wind up having to say that phrase to yourself, it's downright humiliating. Learn to trust your instincts and play it safe until your brain has the chance to catch up.
When You Can Seize a Hidden Opportunity
Warren Buffett and Steve Jobs became rich and famous by refusing to follow the crowd in their business decisions. The same philosophy also can work on a smaller scale. Sherry Slater from the Journal Gazette illustrated this point in a recent story about Autoline Industries' shareholder Sri Bramadesam. In 2007, the American auto industry was fully in the grip of a collapse from which many onlookers thought it might never recover. Betting on U.S.-based automotive manufacturing seemed foolhardy. Not dissuaded by industry doomsayers, Bramadesam jumped at the chance to snap up Dura Automotive's defunct plant in Butler, Indiana. Of course, he supported his hunch with an extensive examination of regional and global trends. Bramadesam convinced commercial lenders to back his play and turned the facility into a thriving workplace with $40 million in annual sales in record time.
Don't let others convince you to go against your gut when they are basing their own business decisions on uncertainty and popular opinion rather than on experience and sound research. You can make more happen as a small business owner if you have the courage to go against the grain. Try this approach when you have the right industry expertise and enough leeway to wait a while for your hunch to pay off. No guts, no glory.