Decide

The problem category

Sooner or later every business reaches a fork. Raise prices or hold them. Take the big order or turn it down. Buy the machine or make do. Someone has to look at what’s known, accept that not everything is, and choose.

That’s the muscle a case competition builds. You’re handed a real decision a small business faces and a short packet of facts about it. Nothing is printed in the back, because in real life nothing ever is. Your job isn’t to find the right answer. It’s to make a call and defend it well enough that a reasonable person would follow you.

Sounds obvious, until you try it and freeze.

The one big idea

Make a clear call and defend it.

The most common way to lose is to never actually decide. A beginner writes three paragraphs of “on one hand, on the other hand,” lays out every pro and con with great care, and then stops, as if naming the trade-offs settled them. It didn’t. The job was the choice, and they skipped it.

So memorize this: sitting on the fence is the one position you can’t score from. A judge can respect a bold call that carries some risk. A judge can respect a cautious call that leaves money on the table. What a judge can’t reward is no call at all, because there’s nothing there to evaluate. Decide, then spend your energy defending it.

How to tackle it

1. Pin the question. Say, in one sentence, exactly what you’re being asked to decide.
2. List the real options, including doing nothing. There are almost always more than two, and “keep things as they are” is always one of them.
3. Put a number on it. You don’t need fancy math. You need one honest calculation: what does this option earn or save, and what does it cost, all of it?
4. Make the call, out loud and early. State your recommendation in the first sentence.
5. Defend it. Give your strongest reason. Name the biggest risk to your own pick, honestly. Then say how you’d manage that risk. A decision that plans for its own weakness beats one that pretends to have none.

The traps

• Analysis with no recommendation. The classic. Don’t let it be you.
• Counting the upside and forgetting the full cost. A number that leaves out a cost isn’t a number, it’s a wish.
• Forgetting to do nothing. Change has a cost too. Sometimes waiting is the smart move.
• Ignoring the risk of your own choice. Every option has a downside. Pretend yours doesn’t and you look like you missed it.

One tool: contribution and break-even

You’ll use these two ideas constantly, so meet them now.

Contribution is what one sale adds after you subtract what that one sale cost to make. A burrito sells for $9 and its ingredients cost $3, so its contribution is $6. That $6 is what’s left to cover everything else and, eventually, to be profit.

Break-even is how much of something you need before a decision pays for itself. A change that costs $720 a month, with each order it enables contributing $6, breaks even at 120 orders a month. Below that you’re behind. Above it you’re ahead. Break-even turns “is this worth it?” into a number you can look at and judge.

How wrong can I be?

Break-even gives you a line. The next question is how much room sits between that line and where you think reality lands, and whether the decision survives when you’re wrong about it.

Call it the margin of safety: the gap between your estimate and your break-even. In the griddle case, break-even was 6 orders a rush and Sunny’s estimate was 9. The margin is 3 orders, a third of the estimate. That’s the cushion. A fat margin means you can be badly wrong and still come out ahead. A thin one means a small misjudgment flips the call from yes to no.

So run every close decision twice. Once on your honest estimate, and once on a deliberately pessimistic one: cut the hopeful number, pad the cost, assume the rosy part disappoints. If the decision still holds under the gloomy version, you can commit with confidence. If it flips, you’ve found the number that actually controls the call, and that’s the one to pin down in real life before you bet much on it.

The point isn’t to be negative. It’s to know exactly how wrong you can afford to be.

Worked walkthrough: The Second Griddle

At the lunch rush, Sunny’s single griddle can’t cook fast enough. The line gets long, and some people give up and leave. A second griddle costs $2,400. Should Sunny buy it?

Here’s what’s in the packet.

• Each order contributes $6. It sells for $9, the food costs $3.
• On a normal rush, Sunny counts about 9 customers who leave without ordering because the line’s too slow.
• The rush runs about 2 hours a day, 20 days a month.
• A second griddle needs a second pair of hands during the rush. A cook costs $18 an hour, so 2 hours a day across 20 days is $720 a month in added labor.

Step 1. Pin the question. Buy the second griddle, yes or no?

Step 2. The options. Buy it and staff it every rush. Buy it and staff it only on the busiest days. Or do nothing and keep turning customers away.

Step 3. Put a number on it, and mind the wrong turn.

Sunny’s first instinct is to size the prize. Serve those 9 lost customers and that’s

9 orders × $6 × 20 days = $1,080 a month in new contribution.

A $2,400 griddle earning $1,080 a month pays for itself in just over two months. Buy it, done. Except that number is a wish, not a fact. It counted the upside and skipped a cost: a second griddle is no use with nobody on it, and a second cook runs $720 a month. The honest number is

$1,080 − $720 = $360 a month.

Different picture. Payback on the $2,400 griddle is now

$2,400 ÷ $360 a month ≈ 6.7 months, not two.

Still positive, no longer a lock. So run one more check, because “9 customers leave” is an eyeball estimate and might be soft. How many extra orders per rush would Sunny need just to cover the cook’s $720?

$720 ÷ 20 days ÷ $6 = 6 orders per rush to break even.

Sunny thinks the number is 9. Break-even is 6. That’s a cushion of three orders a rush, sitting on top of an estimate that could be high. Close call, not an obvious one, and pretending otherwise is how you get burned.

Step 4. Make the call. Buy the griddle, but treat the second cook as a trial, not a commitment.

Step 5. Defend it. Strongest reason: even on the honest math it adds $360 a month and pays back inside a year. Biggest risk: the case rests on 9 lost customers a rush, and break-even is 6, so a small overcount and the cook stops paying for itself. How to manage it: run the second cook for one month and count the real extra orders per rush. Above 6, keep the cook. Below 6, keep the griddle for the busiest days and drop back to one cook. The trip-wire is set before the risk arrives, which is how you handle a number you aren’t sure of.

Here’s the whole thing on one page.

	Buy, staff every rush	Buy, staff busy days only	Do nothing
Up-front cost	$2,400	$2,400	$0
Monthly net	+$360 if the 9 holds	lower, but safer if demand is soft	$0, lost sales continue
Payback	~6.7 months	longer	never earns anything
Main risk	the 9 is an estimate; break-even is 6	fewer rushes covered	customers keep leaving

And the recommendation, in a paragraph:

Buy the second griddle. After a second cook it adds about $360 a month and pays for itself in under a year. The case isn’t a lock: it rests on our estimate of 9 lost customers a rush, and we only have to lose 6 to fall below break-even. So we’ll run the second cook as a one-month trial and count the real extra orders. Above 6 a rush, the cook stays. Below 6, we keep the griddle for peak days and drop the cook.

That’s a decision. It chose. It counted the full cost, named the risk, and built a trip-wire for the number it couldn’t be sure of.

What good looks like

Compare two answers. Neither is a cartoon. The weak one is what a sharp, confident student actually turns in.

A weak answer:

“Buy the griddle. Those 9 lost customers a rush are worth 9 times $6 times 20 days, so $1,080 a month. Against a $2,400 griddle, that pays back in just over two months. Clearly worth it.”

It decides. It uses a real number. It’s delivered with confidence, so it reads as strong. And it’s wrong in the one way that matters: it counted the $1,080 upside and dropped the $720 cook. The two-month payback is off by a factor of three, and because the answer never met the true $360 net, it never noticed that break-even at 6 is uncomfortably close to an estimate of 9. No risk named, no trip-wire built. Confident, numerate, and betting the truck on a wish.

A strong answer is the recommendation above. Same facts. The difference is that it counted every cost and then planned for the number it wasn’t sure of.

Decide challenges are scored on four things, each worth a quarter: a clear recommendation, sound reasoning, honest trade-offs, and organized delivery. The weak answer nails the first and the last and fails the middle two. That’s the dangerous kind of wrong.

A second walkthrough: The Delivery App

Back in the chair with Sunny.

A delivery app wants to list Sunny’s truck. Customers order on their phones, the app handles the delivery, and it takes 25% of the menu price on every order it brings. No sign-up fee. The two griddles and two cooks, Dylan and Mara, can handle more daytime volume without added staff. Should Sunny sign up?

Here’s the packet.

• A burrito is $9. On an app order the app keeps 25% of $9, which is $2.25, so Sunny collects $6.75. Food is still $3.
• The app projects about 100 orders a week.

Step 1. Pin the question. List on the app, yes or no?

Step 2. The options. List and take every order. List but only during slow hours, to fill gaps. Or stay walk-up only.

Step 3. Put a number on it, and mind the wrong turn.

First, contribution on one app order:

$6.75 − $3 = $3.75 per app order.

Less than the $6 a walk-up gives, because the app took its cut. Now the tempting move: 100 orders a week at $3.75 is

100 × $3.75 = $375 a week in new contribution.

Free money, sign today. Except that treats all 100 as new customers, and they aren’t. Some are regulars who used to walk up and pay full, and now order the same burrito through the app. For each of those Sunny doesn’t gain $3.75. Sunny gives up the $6 walk-up contribution to collect $3.75, a loss of

$6 − $3.75 = $2.25 per cannibalized order.

So the split is everything. Say 60 of the 100 are truly incremental, brand-new orders, and 40 are cannibalized regulars. Then

incremental: 60 × $3.75 = $225. cannibalized: 40 × $2.25 = −$90. net: $225 − $90 = $135 a week.

Still positive, but a long way from $375, and it turns on the split. How many of the 100 have to be genuinely new just to cover the discount handed to the switchers? Test it at 38 new and 62 switching:

38 × $3.75 = $142.50 gained, 62 × $2.25 = $139.50 lost, about a wash.

So Sunny needs roughly 38 of the 100 to be new business. The projection assumes 60, which clears it, but the app has every reason to call every order new.

Step 4. Make the call. Sign up, but treat it as a trial and watch the split, not the headline order count.

Step 5. Defend it. Strongest reason: on a realistic 60/40 split it adds $135 a week, over $500 a month, with no new staff and no fee. Biggest risk: cannibalization. If far more than 40 of the 100 are regulars trading a $6 order for a $3.75 one, the gain shrinks fast, and past about 62 switchers the app is losing money. How to manage it: the trip-wire is total weekly orders. Count a normal week’s walk-up orders before the app. After, watch whether total orders actually rise, and by how much. Climb near 60 a week and the app is real new business. If total barely moves while app orders pile up, customers just switched channels and now pay Sunny less for the same burrito, so drop the app or hold it to slow hours.

That’s the call. It counted the commission, separated new money from money that only changed pockets, and set a trip-wire on the one number that decides it.

Try It: The Cold Case

Now you sit in the chair. The worked answer is in Appendix A. Try it before you look.

Sunny is losing food to spoilage: about $300 a month thrown out, a figure that comes straight off the trash-out sheet, so it’s measured, not guessed. A better refrigerator costs $900 and would cut spoilage to about $120 a month. Should Sunny buy it?

Work out the monthly saving and the payback, then make the call and defend it, with one risk and how you’d manage it. Mind the trap from the walkthrough: your saving is the amount spoilage drops, not the whole spoilage bill.

Five minutes on paper. Then check Appendix A.

More practice

Four more, same rules. Work them on paper, then check Appendix A.

1. The Coupon. Sunny prints a “$2 off any burrito” coupon for one week. It should pull in about 25 new customers who wouldn’t have come otherwise, each buying one $9 burrito. But regulars will use it too: about 40 orders that would have been full price will now be $2 less. Normal contribution per burrito is $6. Should Sunny run the coupon? Work out the week’s net, then make the call.

2. The Saturday Market. Sunny can add a Saturday farmers-market shift and expects about 60 orders at $6 contribution each. It costs a $50 stall fee plus a cook for 5 hours at $18 an hour. Is it worth it? Find the net, the break-even in orders, and make the call with its risk.

3. The Punch Card. Sunny wants a loyalty card: buy 9 burritos, get the 10th free. “The free one only costs me $3 in food,” Sunny figures, “a cheap way to keep regulars.” A burrito is $9, food is $3, contribution is $6. Sunny has about 40 regulars, and each would fill one card a month, meaning each redeems one free burrito a month they’d have bought anyway. What does a free burrito really cost Sunny, and what’s the card’s true monthly bill? Then make the call.

4. The Extra Dollar. Sunny is thinking about moving the burrito from $9 to $10. Food still costs $3. Right now Sunny sells about 600 burritos a month. A dollar more will scare some customers off, and Sunny expects orders to fall about 10%. Should Sunny raise the price? Work out the monthly contribution before and after, then find how far orders could fall before the raise stops paying. Make the call.

Take it live (optional)

Ready to test this muscle for real? Each of the five programs has a bank of live team challenges, run with a facilitator and scored like a competition. You don’t need them to finish the book; the walkthrough and practice above already cover the skill. To show you exactly what one looks like, here is a full Decide challenge, start to finish, including the answer key. Work it on your own, or run it with a team. The other four in this bank stay sealed, so they’re fresh when you compete.

A full challenge: The Loyalty Card

The setup. Jasmine Reyes runs the Coconut Grove Cafe, and she has already decided to launch a loyalty program: buy nine drinks, get the tenth free. What she can’t decide is how to run it, on cheap paper punch cards or on a loyalty app a vendor keeps pitching her.

The paper card is almost free to print, but two things nag at her. People cheat it: a card is easy to photocopy and a stamp is easy to fake, and every fake punch is a free drink given away for a sale that never happened. And the card is a black box: when a regular stops coming in, she has no idea, and no way to win them back. The app costs real money every month, but a digital account can’t be self-stamped or copied, so the cheating stops, and it finally tells her who her customers are, so she can nudge the ones who drift away. She’s torn between cheap-but-blind and pricey-but-smart, and she wants your team to decide it with numbers, not a gut feeling.

The reward is the same either way, so it cancels out. Compare only what differs between the systems.

What differs	Paper punch card	Loyalty app
Program cost	about $25 a month (printing)	$150 a month (platform fee)
Fraud leakage	about 30 fake free drinks a month, about $90	about $0, a digital account can’t be faked
Customer data	none, the card is anonymous	captures who your customers are
Reaching customers	none	about 50 extra visits a month at $2.50, about $125

A free drink costs the café about $3 in ingredients, and the reward runs about $300 a month on either system, which is why it cancels out.

Your task. Recommend a system, card or app, and prove it with the numbers. Set the shared reward aside, put a dollar figure on each thing that differs, build the comparison one layer at a time, name the single value that tips the call, then name the biggest risk to your choice and how you’d manage it.

Facilitator answer key. Build it in layers, because the order is the lesson.

• Sticker price. The app costs $150 a month, the cards about $25, so on price alone the app looks about $125 a month more expensive.
• Add fraud. The card leaks about $90 a month to cheating, the app about $0, so after fraud the app’s extra cost is only $125 − $90 = $35 a month. Stopping fraud alone does not cover the fee.
• Add the customer data. The app lets Jasmine message known customers, driving about $125 a month in extra visits a paper card can never earn. Now the app comes out about $90 a month ahead, roughly $1,080 a year.

So the call is the app, and the value that tips it isn’t the fraud, it’s the customer data: being able to reach customers you’d otherwise lose without ever knowing they were gone. The biggest risk is adoption, since the card is universal while the app only works for students who download it. A strong answer names the adoption level at which the app stops paying and how it would push sign-ups.

The rest of the Decide bank

Four more, sealed for fresh scored play. Pin the question, list the options including doing nothing, put a number on it that includes every cost, choose, and defend the choice with its biggest risk.

1. The Big Order. A large customer wants a big order at a discount. Take it or not?
2. The Rush-Hour Problem. The morning line is out the door. How should the café fix it?
3. The Price Hike. Should the café raise prices, and if so, by how much?
4. Going Green. Should the café spend on a sustainability change? Is it worth it?

Going deeper

Real decisions rarely arrive with clean numbers in a packet. The next habit to build is estimating the numbers yourself when nobody hands them to you, and stating plainly what you assumed, so anyone can challenge the assumption instead of the guess. The harder cases in the bank start withholding the figures on purpose.