When it comes to running a successful company, Richard Branson is a seasoned pro.
He started his first business aged just 17 and has been in the game for 50 years, making billions of pounds along the way. Currently, the Virgin Group owns over 200 companies in more than 30 countries worldwide.
On the Virgin website, Branson has just revealed some of his top tips on making good business decisions. He said it is not that different to sitting on a jury, as you should tackle all reasonable doubt before making a judgement.
Here are five rules which he believes have got him to where he is today:
1. Don’t judge a book by its cover
Branson said although he’s big on first impressions, he doesn’t let them influence his decision making. If you have a good feeling about an idea, you may well be right, but it’s important to be objective.
2. Do your homework
You should go digging around for any red flags, said Branson, because discovering the drawbacks of a new venture after you’ve done the deal doesn’t do you any favours. It’s especially important to do some investigating when everyone is unanimously in favour of going ahead with the idea, he added.
“Nothing is perfect, so work hard at uncovering whatever hidden warts the thing might have and by removing them you’ll only make it better still,” Branson said.
3. Avoid making decisions in isolation
Branson refers to something called “the decision stream,” which is basically how every decision has an impact on your ability to take on future opportunities.
While one idea might seem too exciting to pass on, you have to consider how it will affect your existing projects or priorities. Weigh up the risks of putting something on hold, or prioritising it over your other ideas.
4. Do everything you can reduce risk
According to Branson, all wise investors find inventive ways to mitigate losses if things go wrong.
“For example, when we started Virgin Atlantic, the only way I got my business partners in Virgin Records to begrudgingly accept the risks involved was by getting Boeing to agree to take back our one 747 after a year if things weren’t working out as we hoped,” he said.
“To this day, with giant, capital-intensive ventures like Virgin Galactic and Virgin Voyages, we always spend a lot of time in finding inventive ways to mitigate the downside.”
5. Give it time
Branson says the “orchestrated procrastination” approach is worth trying because doing more research than less is very rarely a bad thing. Giving yourself more time might mean you find better alternatives, or the market could change and you’ll find yourself glad you didn’t take the chance.
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