Being an entrepreneur inevitably means having way more projects and opportunities than you can possibly handle. Around this time of year, we all get busy with our planning systems and spreadsheets, setting goals, and making plans.
The bad news is, the longer you work as an entrepreneur, the more opportunities you’ll get, and the harder the decisions seem to become…
But the good news is, there are tools and systems for making these decisions much easier.
One of my favorites is a simple little spreadsheet technique for calculating weighted averages. I just list out my projects or choices one per row, and evaluate them against all the factors which I consider important to the decision in the columns. Finally, I assign a relative importance level to each of the factors, and the simple spreadsheet calculates a “batting average” (overall score) for each project.
Have a look at the video to see what I mean, and feel free to download this example here
NOTE: be sure to download the spreadsheet here to follow along.
(My apologies for the visual quality of this particular video)
Hope it helps,
Dr. G 
PS – Are you relatively new to the game, or still struggling to make your first dollar of profit online? If so, I’d highly recommend you pick up a copy of the Internet Marketing Truthprints
{ 13 comments… read them below or add one }
This is more than just a spreadsheet tool. A really good thinking and evaluation aid. Very useful and unique. Thanks
Hi Glenn and Happy New Year.
Thank you for continuing to provide great, actionable information. That’s a really cool little tool and I’ll be giving it a run in just a minute.
On the video you said something about “being awash with opportunity.” Well, ain’t that the truth! And I expect the biggest consequence of that for a lot of people is allowing ourselves to be pulled in too many directions at once and, therefore, not really going anywhere.
I’m sure a lot of folks will find this approach and the spreadsheet useful. I’m not much of a Twittererererer, but I’m sure some of your other readers are and will let their followers know about this page.
All the best,
TheNightOwl
Hi Glenn,
A really handy tool. I just ran the tool against a list of 2010 projects and the two projects that I thought would be at the bottom of the list actually came up as the Top 2. Just goes to show that when you have a structured methodology such as what you teach, it helps to make better decisions. Keep up the good work.
TheOzMan
Just wondering if risk (if you use it) should be a negative number. I changed it (on the importance line, not each project ranking) to a negative, and as risk goes up in a project ranking, the actual weighted score goes down.
Does that make sense, or did I mis-understand the video? Thanks!
Richard … you could use it that way if you like, that’s an interesting application.
Thanks, I tried it as well on fixing an older car vs buy a new car. The monthly payment (amount and term) of a new car is extremely important, but not in a good way. I made that negative, and as my rating increases, the Weighted Score decreases, which makes sense (at least to me). Thanks again…
Thank you, that really was helpful and timely. I plan to try it today.
<strong>Happy New Year to you too!
Love this post, but the downloadable spreadsheet was only a read-only document for me — am I missing something?
Would love to be able to use this for some business decisions.
Thanks again for all the great insights.
Great idea. I missed how the weighted score is calculated for each project. Can you refer me to the relevant article or video?
This technique is even more effective as a group decision making tool. Getting the group to a) decide what the factors are, b) decide their relative weights and c) agreeing a score for the projects (or whatever you are trying to decide on – I’ve used it for houses when house hunting) is a fantastic way of opening up any difficult areas for group members to discuss and for arriving at a consensus about the decision to be made.
Thanks for the example Steve, we definitely agree!
(We used to use it to evaluate name candidates in large groups)
Thanks so much for this CONCISE explanation Glenn!
Not only is this exactly what I needed this week, it is also the first time I have fully understood this concept. I have seen something similar before, but the explanation and examples got so convoluted, I got lost. And my formal education was in Quantum Mechanics!
Happy Holidays,
Steve
P.S. Finishing my Glenn Club Training I expect will be a top priority for me in 2010!
I like it and will use it, thank you.