3 Psychology-Backed Tips to Make Better Business Decisions

Making quick and effective decisions can be empowering. Here’s what you need to know.

How can you make better decisions when the stakes are high?

As a solopreneur, every choice — from signing a new client to launching a bold idea — shapes the future of your business. Yet when the options pile up, even confident entrepreneurs can slip into decision paralysis.

New research in psychology suggests that our ability to make strong decisions has less to do with talent and more to do with energy management, timing, and alignment with our values. In other words, you can train yourself to make better, faster, and more confident choices — even under pressure.

Here are three research-backed strategies to sharpen your decision-making skills and keep momentum on your side.

💡 Quick Takeaway:

• Protect your mental energy to prevent decision fatigue.
• Take action even when you don’t feel 100% ready — clarity comes with movement.
• Align choices with your core values to reduce conflict and boost confidence.

How Can You Avoid Decision Fatigue as an Entrepreneur?

As solopreneurs who are constantly on the move, managing our time and energy is crucial to the success of our business.

Every decision you make, big or small, adds to the cognitive load on your brain. Too much load and your decision-making powers begin to falter. This is known as decision fatigue.

Decision fatigue can be a major obstacle in our decision-making process, making it harder for us to make clear and effective decisions. It can also lead to burnout and negatively impact our productivity and well-being.

One example of this phenomenon can be found in a study published in the Proceedings of the National Academy of Sciences. Researchers examined the decision-making tendencies of parole judges. While logic would suggest that judges should make decisions based only on the facts at hand, the reality was that judges’ sentencing tendencies were influenced by extraneous factors. For instance, judges tended to be more lenient earlier in the day and right after lunch and were less lenient as the day progressed.

With many of us living a digitally nomadic lifestyle, it's even more important for us to be mindful of decision fatigue, as the fast-paced and constantly changing nature of our work can put extra strain on our decision-making capabilities.

It's important to recognize the signs of decision fatigue, such as feeling overwhelmed, anxious, or indecisive. If decision fatigue is causing you distress, it’s never a bad idea to reach out to a mental health professional. By being aware of these symptoms and taking steps to manage them, we can ensure that our decision-making abilities stay sharp and effective.

Here are some ways to ensure you always come out on top when making difficult decisions:

Delegate or automate tasks that are not essential or do not require your specific expertise.

Talk to a trusted loved one before making a decision, especially when you are feeling fatigued.

Make a ‘loose’ decision and review it when you are in a clearer state of mind.

Feeling overloaded? Read our guide on managing freelancer stress.

Why Is Speed Important in Decision-Making?

Decision paralysis can also trigger our procrastination tendencies. When we feel under-confident while making a decision, we often postpone the ordeal altogether so as to not deal with it immediately.

Again, this can be especially true for digital nomads who run businesses as they travel.

However, research suggests that the more we delay a decision, the less likely we are to ever make it. In a study published in Nicotine and Tobacco Research, most smokers who delayed their quitting date because of lowered willpower saw the least success in actually quitting in the future.

It's important to remember that learning and reiteration can happen along the way, but it is action and not thought that predicts success or failure. Therefore, we should make decisions even if we don’t feel qualified or confident enough to make them. The key is to strike a balance between being able to make quick decisions while also taking the time to weigh our options.

By taking action, we can gain momentum and build our confidence in our decision-making abilities, which will ultimately lead to greater success as Xolopreneurs.

How Can Values Help You Make Better Decisions?

Feeling conflicted can be a major obstacle in the decision-making process, particularly when faced with complex dilemmas that have to do with your morals and values. In these situations, research published in the Journal of Research in Personality suggests that we should strive to "ego-align" our decisions.

Ego-alignment refers to the connection between an individual's understanding of what is expected of them and what feels like the "correct" action in pressing situations. By consulting our values, we can make decisions that are aligned with our beliefs and goals.

This is particularly important for solopreneurs, as our values can serve as a guiding principle when making important business decisions.

It's essential to take the time to reflect on what matters most to us and to use this knowledge to inform our decision-making process. By doing so, we can ensure that our actions align with our values and that our decisions are in line with our overall vision for our business and life.

Leadership also means balance. Learn how “nice leaders” earn respect.

Great decision-making isn’t about always being right — it’s about staying aware, aligned, and adaptive.

When you protect your energy, act even in uncertainty, and let your values steer your choices, you’ll find yourself making smarter, faster, and more authentic decisions.

As solopreneurs, we thrive in ambiguity — but we don’t have to be ruled by it. Each thoughtful decision builds resilience, trust, and momentum toward your bigger vision.

⚡️ Make room for clarity. See how Xolo helps you simplify business decisions so you can focus on what truly matters.

💬 FAQ: Better Decision-Making for Entrepreneurs

Q1: What is decision fatigue and how does it affect entrepreneurs?
Decision fatigue happens when your brain becomes mentally drained after making too many choices. It can reduce clarity and increase anxiety, leading to slower or impulsive decisions.

Q2: How can I make faster, more confident decisions?
Simplify your options, set time limits for choices, and prioritize key decisions early in the day when your focus is strongest.

Q3: What causes decision paralysis?
It often comes from overthinking, fear of failure, or too many options. The best fix is action — making small, imperfect moves builds confidence and momentum.

Q4: How can my values help me make better business decisions?
When your choices align with your values, they feel easier and more authentic. Defining what truly matters to you — integrity, growth, balance — can cut through confusion and guide you quickly to the right call.

Q5: What if I make the wrong decision?
No decision is final. Every outcome brings feedback. Reflect, adjust, and move forward — progress matters more than perfection.

About Mark

Mark Travers, Ph.D., is an American Psychologist with degrees from Cornell University and the University of Colorado Boulder. Xolo helps him run his online therapy practice, www.awake-therapy.me, from whatever part of the world he is currently living in.