Thinking Like a Purchaser – How to Make Big Decisions With Excel

Making big decisions in life is something that can’t be avoided no matter how hard you try. Whether you’re deciding on where you want to live, on whether or not you want to take a job, or on whether someone you’re dating is a keeper or not; decisions like this are going to come up every so often and shirking away from them will only make them more difficult and more pressing over time.

Not making a decision then is not an option, but likewise it can be very nerve-wracking making up your mind when you’re not sure you’re doing the right thing – particularly if your future happiness, your finances or your lifestyle are resting on the outcome.

For help, let’s look at people who make big decisions every day for a living. I’m talking about the purchasing department of any big organisation, whose job it is to decide between multiple options and companies when spending millions for their employers. It’s scary stuff, so how do they cope?

And the answer is that they use a very simple system, one that you can easily replicate using good old MS Office or another piece of spreadsheet software. Follow these steps and you’ll create a tool that can help you to tackle all of life’s scary decisions…

The Basics

Essentially you’re going to create a spreadsheet that operates in a similar way to a pros and cons list, but which takes it one step further by adding more detail.

To begin with you are going to create a space to write different criteria, and these can be any of the points that the chosen solution needs to meet. So if you were looking at four potential properties to move into, those criteria might include things like ‘proximity to work’, ‘cost’, ‘cosiness’, ‘size’ and ‘investment potential’. On the other hand, if you were trying to decide whether or not to leave your current partner you’d put criteria for the best possible outcome ‘finance’, ‘my happiness’, ‘their happiness’, ‘living situation’, ‘ability to chase dreams’, ‘stress’.

Now what you’re going to do is score each of those points out of ten. So if one house was huge and another was small then you might give one a 9 and one a 4. If staying with your partner is making you stressed, but you’d also be stressed at being alone then you might make both a ‘5’.

Next: Adding the Weighting

Where this is going to differ from a pros and cons list though is in the weighting that you’re going to add. Essentially you are going to decide which of these points is most important and then give each a weighting on that basis as a percentage. For most of us cost is one of the biggest factors and so you might put this at 50% of your decision. If you’d put ‘neighbours’ down on your sheet though, then you might think of this as a relatively small factor and so give it a weighting of 5%.

Adding Up Your Scores

Now when you add up your scores you are going to treat each as a certain percentage. So if you have given neighbours a 4/10 for one property and you’ve rated the importance of that category at 5%, it becomes 40% of 5% – which of course is 2 – or 2%.

Add the scores together for each category and you should end up with a final total that represents just how good each option is. If they draw, simply add another criteria to help you make up your mind. While this won’t help you to make the right decision every time, it will certainly give you a much clearer visualisation of the strengths and weaknesses of each option, which can guide you effectively to make the right call.

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