An assumption is a proposition that is taken for granted, as if it were true based upon presupposition without preponderance of the facts. (From WikiPedia)

I used to base almost all of my decisions on assumption — business and personal. And I still base most of my decisions on assumptions because assumptions are necessary if we expect to get through the day.  I don’t need a “preponderance of facts” to decide where to stop to get coffee in the morning or to decide what podcast to listen to first because these are not high-value decisions. On the other hand, critical decisions (like what to prioritize in my marketing activities) should never be based on assumption.

You don’t have to base every decision on “a preponderance of the facts,” but important decisions should not be based on assumption.

Here’s the problem with assumptions — they are often wrong.

Of course, right? If you make a decision based on little or no facts, your decision stands a good chance of being “wrong” (or as I prefer to think of it, ‘not optimal’ because a decision can often be OK, but sometimes OK is the result when the result could have been ‘fantastic’ given a slightly different decision).

Assumptions are basically gambles where you hope for winning hand even though you can’t really see the all the cards.

Now making the ‘wrong’ decision about where to pick up a latte in the morning isn’t a big problem — so what if the line is a little longer than you expected or they are out of cinnamon chip scones?

But if you are talking about planning your marketing activities, then it pays to see as many of the cards as you can.

Think about it… in the absence of facts the only way to know if you are on track or not is to wait and see what happens.  The problem is, with some decisions it may be months or years before you know you’ve made the wrong decision.

Take, for instance, the big decision of which niche to target.  If you make your niche decision based on assumption, you might spend 6-24 months working at building a presence in that market, building a list, creating products, developing JV relationships, etc. before you know if that niche is profitable. But with just a few facts (niche size, competitive analysis, etc.) you can greatly increase your chances of making the right decision about what niche to target.  The wrong decision can, in this case, put you out of business.

For every one fact you acquire relative to any decision, your chances of making a serious error decline dramatically.

Like in a card game, a single fact goes a long way. If you are seeking a four-of-a-kind in Kings, and you see another player pick up a King from the discard pile, that one fact will tell you that your strategy is not likely to work out.

If you are trying to decide where to focus your traffic generation efforts, knowing which of your current traffic sources is the most profitable will help you dramatically.

Lately, I’ve gotten much better at forcing myself to make fact-based decisions; especially when it comes to anything that requires my time.  Time is my most precious asset and where to spend my time is among the most critical of decisions for me.

Facts are not always statistics, sometimes they are simply true statements.

For instance, I mostly use ‘true statement’ type facts when deciding what VisiOlo projects to spend my time on.

Here are the key statements that I want to be ‘true’ in order for me to spend my time on a project.

• This project serves the needs of my core audience.
• This project will result in increased profit for my business.
• This project is something that my team is technically capable of doing without excessive effort.
• I have/have not proven the core assumptions of this project through testing.
• This is project is more critical than any other project on my ‘open project’ list.

Now, these statements are usually ‘relatively’ true for my projects — which means they are tru-ER for my top priority projects than they are for my lowest priority projects.  For instance, I may not know (for sure) how much increase in profit I will see for a given project — no one has a crystal ball — but I can know that relative to my other projects, my highest priority project appears to have the highest probability of generating profit.

OK, that is getting a bit too technical, what I mean is when I say “this project will result in increased profit for my business,” what I really mean is “based on what I know today, this project looks like it will generate more profit than other projects I could work on.”

I haven’t really formalized the process, but these are generally the statements that guide my project choices.  When I do get around to formalizing this ‘project vetting’ process, I’ll add a quantitative scale to each statement.  I’ll have something like a scale from 1 to 5 with 1 being false and 5 being true.

Hmmm. That would be a nice feature for VisiOlo too, because the more I think about it, I think the VisiOlo’s true role is to help Infopreneurs make the right decisions about where to spend their ‘project’ time.  We do a decent job of providing data about sales systems, but I’m also interested in helping with the decision making and prioritization process because facts without implementation are useless.

Photo Credit: http://www.flickr.com/photos/seier/ / CC BY 2.0

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