The moment costs jump I was on a call last week with someone running a small food distribution business. Their olive oil supplier had just sent through new pricing. Not a small adjustment. A 34% increase, effective in six weeks. They had three options in front of them. Absorb the cost. Pass it to customers. Find a new supplier. Each felt urgent. Each had consequences they could not fully see. This is the moment most people make a decision based on gut instinct or panic. Both are unreliable when margins are tight. A decision matrix does not give you the answer. It gives you a structure to think through the answer. That distinction matters. Why cost spikes break normal thinking When costs rise unexpectedly, you are dealing with two problems at once. The first is the actual financial pressure. The second is the cognitive pressure. Your brain wants resolution. It wants the discomfort to stop. So it reaches for the first plausible option and calls it the right one. I have seen people switch suppliers without checking lead times. I have seen people raise prices without modelling the volume drop. I have seen people absorb costs they could not afford because they were afraid of the conversation with customers. None of these decisions were stupid. They were just rushed. A decision matrix slows you down just enough to see what you are actually choosing between. What a decision matrix actually is Forget the complicated versions. A decision matrix is a table. Rows are your options. Columns are the criteria that matter for this decision. Each cell gets a score. That is it. The value is not in the maths. The value is in forcing yourself to name the criteria. Because until you do that, you are comparing apples to feelings. For a cost increase, your criteria might include: impact on margin, impact on customer retention, implementation time, reversibility, and risk of quality drop. You score each option against each criterion. Usually 1 to 5. Then you weight the criteria by importance. Then you multiply and add. The highest score is not automatically the winner. But it is the starting point for a real conversation. A worked example Back to the olive oil problem. Three options: Absorb the 34% cost increase Raise prices by 20% and absorb the rest Switch to a new supplier with 15% lower costs but unknown quality The criteria we chose: margin impact, customer retention risk, speed of implementation, quality risk, and reversibility. We weighted margin impact and customer retention highest. This was a business with thin margins and long customer relationships. Option 1 scored well on retention and speed, but terribly on margin. Option 3 scored well on margin, but poorly on quality risk and reversibility. Option 2 landed in the middle on most criteria. The matrix pointed to Option 2. But the conversation it opened was more useful than the score. We talked about which customers could tolerate a price increase and which could not. We talked about whether a phased approach made sense. We talked about what would trigger a supplier switch later. None of that would have happened if they had just picked the first thing that felt reasonable. When to use this Not every cost increase needs a matrix. If your software subscription goes up £20 a month, just pay it or cancel it. But when the increase is significant enough to affect your margins, and when you have more than one viable response, and when the consequences of getting it wrong are real, then slow down. I have been watching the news on tariffs and supply chain disruptions lately. If you import anything from affected countries, or if your suppliers do, you are probably looking at cost increases that were not in your plan. The same applies if your business touches energy prices, food supply, or logistics. These are not theoretical risks. They are already showing up in invoices. A decision matrix will not make the problem go away. But it will stop you from making a decision you regret in three months. How to build one in fifteen minutes You do not need fancy software. A spreadsheet works. Paper works. First, list your options. Be honest about what is actually on the table. If switching suppliers is not realistic in your timeframe, do not include it. Second, list your criteria. What actually matters for this decision? Not what sounds professional. What matters. Third, weight the criteria. Give each one a number from 1 to 3. If margin is the thing that will make or break you, it gets a 3. If reversibility is nice but not critical, it gets a 1. Fourth, score each option against each criterion. 1 is bad, 5 is good. Fifth, multiply each score by the weight and add up the totals. Sixth, and this is the part people skip, look at the results and ask whether they feel wrong. If they do, you have probably missed a criterion or misjudged a weight. Go back and adjust. The alira.london Decision Matrix tool does this automatically and keeps a record of your reasoning. Useful when you need to explain a decision to a partner or revisit it later. But the process matters more than the tool. The real output The number at the end is not the point. The point is that you now have a clear record of what you considered, what you prioritised, and why you chose what you chose. When costs rise again, and they will, you have a template. When someone asks why you raised prices or switched suppliers, you have an answer that is not just "it felt right." Structure does not remove uncertainty. It just stops uncertainty from running the show. What to do this week Pick one cost that has increased in the last three months. Write down the options you have for responding. Even if you have already made a decision, do this exercise. List five criteria that matter for that decision. Weight them 1 to 3. Score each option. See what comes out. If the result surprises you, sit with that. It might mean you made the right call for reasons you had not articulated. Or it might mean you need to revisit something. If you want a structured template, the Decision Matrix at alira.london takes about ten minutes to complete. But the thinking is what matters. Do that first.