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Top Skills That Every Entrepreneur Needs to Have
June 15, 2022
No one is ever fully prepared for running a business. Even if you’ve spent years studying at a business school examining case study after case study, learning theory after theory, and completing assignment after assignment, nothing compares to actually having to make decisions for real.
Sure, this kind of education can certainly give you a helping hand as you’ll have some of the tools you need to run a business, but the vast majority of entrepreneurs make the leap of faith into business ownership before they’ve even done that.
Managing a company, whether it be a small startup or a global conglomerate, is hard. There is a lot of pressure resting on your shoulders, if you employ people their livelihood is at stake just as much as your own. You may also have shareholders that you are accountable to, creditors that you need to keep satisfied, and competitors that you need to beat.
With all this going on, it’s no wonder that the vast majority of businesses eventually fail. According to DCI, 60% of all new businesses fail within their first three years while Investopedia claims that 90% of all businesses eventually collapse, although 30% do make it to their 10th birthdays.
With the odds stacked so heavily against you, you need to find every possible advantage you can to tip the scales a little bit more in your favour. Thankfully, these skills can certainly help.
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While some people may criticise a business that is “run by accountants” for their lack of focus on other areas, the truth is that every entrepreneur needs to have a good grasp of their numbers if they’re going to stay in business.
If you don’t know what your profit margins are, you don’t know what products you should be pushing to your customers. In fact, you don’t even know if any are actually making you any money.
Of the businesses that fail, the vast majority do so because they run out of money or they can’t turn a big enough profit for their owners.
It might be easy to let your accountant deal with all the finance elements of your business, but if you don’t at least have a grasp of the numbers yourself, you’re doomed.
Many business people rely on intuition, feeling, and instinct when they make decisions. Unfortunately, this often has fatal consequences for their companies as they can often be wrong.
This is why it’s vital that entrepreneurs conduct research while preparing their initial business plan, when developing new products, and before making decisions about expansion. Conducting research for a marketing campaign is also important as you need to understand what your customers will respond to. This was something that PokerStars did ahead of the launch of its I’M IN campaign in 2020. The company’s researchers engaged with existing customers to understand what attracted them to the company and then designed the campaign to touch on these.
If your business is going to grow, you’re going to have to employ people at some point or another. For this reason, it’s important to learn how to manage people and be a leader. For many entrepreneurs, managing people is the most difficult task of all as it isn’t an exact science and requires a lot of practice.
Of course, you need to get the legal elements of HR right and you can hire lawyers and advisors to handle this, but you also need to make sure you are a good boss.
It’s hard to find the balance between being assertive enough that people listen to you and friendly enough that people don’t hate coming to work because of you.
According to Jaluch, poor managers will commonly lack attention to detail, fail to follow procedures, try to be too nice to avoid difficult conversations, be too accepting of poor standards, and cut corners.
Many of Richard Branson’s tips for leaders are the exact opposites of these. He says that entrepreneurs should work to create a positive company culture by hiring the right people, being willing to delegate and trust those employees, and by demonstrating passion for the job.
Since your employees will be a big part of your business and will often be the ones interacting with your customers, it’s important that you get your approach to leadership and management right.