Effectively running a business is about adapting and adjusting to daily challenges, and the ever-changing business environment. Being an entrepreneur takes this a step further and adds the need for creative and critical thinking. There are articles upon articles online about the skills that are needed to thrive in business, and many more about what it means to be an entrepreneur. Navigating all the information out there can be intimidating, and sometimes downright scary when you think of all the abilities we’re told entrepreneurs must have in order to be successful.
When you distil all the data that’s out there, however, five essential skills rise to the top. They’re listed on nearly every list of skills related to entrepreneurship and small business management. The thing about these skills that’s most interesting, is that they’re all achievable, and have more to do with the individual than whatever industry that person is operating in. These skills transcend product and service, and prove that the most important factor in your success is you.
This blog will cover skills one to three. Next week’s blog will cover skills four and five.
SKILL 1: Time Management
The one thing that can’t be renewed or replaced in your business is time. Products can be restocked. Employees can be replaced. Money can be replenished. But once time has passed, that’s it. It’s gone, and you can’t get it back. Effective time management is about more than having a day planner with pencilled in appointments. It’s about being aware of the effort and energy required to accomplish certain tasks. It’s about recognizing which tasks contribute to progress and which don’t. It’s about choosing to spend your time where it counts, and knowing when and what to delegate.
One of the issues often overlooked with time management is how it’s used to maintain quality. When business is booming and you’re taking on more and more clients, how do you manage your time effectively to ensure that each client gets the best from you? When business is a little slow, and you’re working on marketing efforts, focusing on attracting new clients, how do you balance the time needed for that with time needed for serving the clients you already have? Above all else, this particular skill can be considered the most important. You must be able to effectively prioritize your activities and attention, and allocate sufficient time to things that matter. That’s the only way you’ll get where you want to be, and beyond.
SKILL 2: Financial Management
Business is about making money. Regardless of product or service, being in business means that at the end of the day you intend to make a profit. The thing is, however, that in order to determine whether you’re making a profit or not, you’re going to need to know how much you’re spending, how much you’re making, and you’re going to need to be able to move around resources where they make the most positive impact. If you don’t understand finances and how they work in business, you’re setting yourself up for failure.
You don’t have to be an expert business analyst or accountant, but you need to be aware of a few basic things. First, how much does it cost you to deliver your product or service? This includes all areas of expenditure such as transport, raw materials, utilities, advertising, administrative support, and expertise. Have you thought about it seriously? Have you accounted for everything you’re putting out? Second, do you understand your statutory obligations? Those are two fancy words which simply mean responsibility to government. Whether you’re a sole proprietor or director in a limited liability company, there are tax obligations and record management obligations stipulated by law that you must be aware of. Missed deadlines or unfulfilled duties can be distressing and costly.
Finally, do you understand how to grow your finances? The difference between your income and your expenditure is your profit. What are your plans for increasing your profit? Can you predict how and why profit will increase for your company? Understanding these concepts contribute to sustainability and longevity.
SKILL 3: Relationship Building
Contrary to popular belief, entrepreneurship is not a solo sport. The ability to build and maintain relationships, to function within communities and groups, and to recognize when relationships are toxic, is another essential component of success. There is a lot to learn, and the learning curve can be steep, costly, and sometimes painful, so why not learn from those who have gone before in order to avoid as many pitfalls as possible?
That’s on the learning and development side. Relationships are also important with customers and potential clients. Research suggests that repeat business has a significant impact on revenue, so building and maintaining relationships with your customers, converting them to clients, and understanding the dynamics of it all is the kind of skill every entrepreneur should master. Do you check in with customers to see how they’re doing? Do you find out more about their needs and desires? Do you monitor their challenges to create new and improved products?
Then there are the relationships you have in your personal life. These aren’t directly related to business, but they impact on your well being, your mental state. Do you have an adequate support system? How do you manage your relationships with loved ones? Healthy relationships in this area of your life are important to support you through the difficult times, as well as celebrate with you through the happy times.
TO BE CONTINUED… Look for the next article to learn more about the final two essential skills in our Top Five Skills Every Small Business Owner Should Master.
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Shelley-Ann Edwards-Barran is a writer, editor, writing coach, speaker, and advocate for better writing instruction. She is the CEO of WERD Coach Ltd., a company dedicated to helping writers at many levels – children, academics, authors.