I was recently asked to list 5 skills I think are critical for every business owner, and which are often under-appreciated by those starting their entrepreneurial journey.
These originally featured on the Australian Online Courses website.
There are definitely some specific skills that distinguish successful small business owners from those who work hard but struggle to succeed. In my experience, the top five skills necessary are:
- An innate sense of value
- Sales, and
- Technology (focused on efficiency)
Self-drive is crucial for a business owner because you are 100% responsible for everything that happens in their business. Once the initial start-up excitement wears off, business ownership is a lonely and anxious place to be, and you will be living in that place every moment of every day. Without the inner drive to keep knocking on doors, metaphorically or literally, it will wear you out and you will become part of the 50% of new businesses that fail within the first three years.
Perspicacity could also be described as contextual awareness, or understanding. As a business owner, you need to understand why you make the decisions you make, and more importantly why your clients, staff and suppliers decide and act the way they do. We all make decisions from our own unique situation. Great business owners can define the context others are living within, and thus adjust their message of motivation or sales to be more clearly heard. Many business owners feel their staff should act a certain way, or their customers should buy for a certain reason, and that self-centered worldview destroys their business.
Sense of Value
For mine, the most important skill a business owner can have is an innate sense of value.
Businesses only succeed and grow when they deliver value to their specific target market, and the best entrepreneurs identify where value isn’t being delivered so they can fill that gap in the market. More importantly, they can continue to refine and innovate their business to continue delivering value long after their initial idea has been duplicated. Some people just ‘get’ business, and we’ve all met people who will never wrap their head around being an entrepreneur. This difference, I believe, is this innate understanding of where value does or does not exist.
Every business is a sales business, and those business owners that thrive are those willing to do what needs to be done to win clients in the early days. While inbound marketing efforts like social media, blogging, and videos can be invaluable for acquiring clients in the long term, for a start-up business most sales activity needs to be outbound. This doesn’t mean cold calling and being pushy, just being willing to take your beautiful product or service out to the world knowing some people are going to call it ugly, and being prepared to do it all again the next day anyway.
Technology for efficiency
While start-up businesses can over-optimise their use of technology at the expense of actual client acquisition, it’s critical in the first year or so of a new business to understand how technology can be used to make your workflow process most efficient. Business owners that successfully create a sustainable, profitable business are those who find a way to leverage software solutions like Xero for invoicing and real-time accounts, Trello for team and task management, and Presi or Powerpoint for duplicatable sales presentations. Software with more advanced features, and a larger investment, can wait until you’re profitable. Turning manual processes into systems needs to happen fast.
It’s crucial to note that business case studies are flooded by survivor bias, profiling those who have succeeded but not the vast majority of business owners who have not. This can give hopeful entrepreneurs a false expectation that motivation and grit are the skills that separate the successful from the failures, when in reality there are many wonderful humans who possess those skills and still have not made business ownership work. These skills are necessary, but not sufficient to successful business ownership.