The Skills You Need to Build a Great Business
What makes someone a successful entrepreneur? It certainly helps to have strong technology skills or expertise in a key area, but these are not defining characteristics of entrepreneurship.
Instead, the key qualities are traits such as creativity, the ability to keep going in the face of hardship, and the social skills needed to build great teams.
If you want to start a business, it's essential to learn the specific skills that underpin these qualities. It's also important to develop entrepreneurial skills if you're in a job role where you're expected to develop a business, or "take things forward" more generally.
Some experts think of entrepreneurs as people who are willing to take risks that other people are not. Others define them as people who start and build successful businesses.
Thinking about the first of these definitions, entrepreneurship doesn't necessarily involve starting your own business. Many people who don't work for themselves are recognised as entrepreneurs within their organisations.
Regardless of how you define an "entrepreneur," one thing is certain: becoming a successful entrepreneur isn't easy.
So, how does one person successfully take advantage of an opportunity, while another, equally knowledgeable person does not? Do entrepreneurs have a different genetic makeup? Or do they operate from a different vantage point, that somehow directs their decisions for them?
Though many researchers have studied the subject, there are no definitive answers. What we do know is that successful entrepreneurs seem to have certain traits in common.
We've gathered these traits into four categories:
- Personal characteristics.
- Interpersonal skills.
- Critical and creative thinking skills.
- Practical skills.
We'll now examine each category in more detail, and look at some of the questions you will need to ask yourself if you want to become a successful entrepreneur.
First, examine your personal characteristics, values, and beliefs. Do you have the mindset that's typical of successful entrepreneurs?
- Optimism:Are you an optimistic thinker? Optimism is truly an asset, and it will help get you through the tough times that many entrepreneurs experience as they find a business model that works for them.
- Vision:Can you easily see where things can be improved? Can you quickly grasp the "big picture," and explain this to others? And can you create a compelling vision of the future, and then inspire other people to engage with that vision?
- Initiative:Do you have initiative , and instinctively start problem-solving or business improvement projects?
- Desire for Control:Do you enjoy being in charge and making decisions? Are you motivated to lead others?
- Drive and Persistence:Are you self-motivated and energetic? And are you prepared to work hard, for a very long time, to realize your goals?
- Risk Tolerance: Are you able to take risks, and make decisionswhen facts are uncertain?
- Resilience:Are you resilient , so that you can pick yourself up when things don't go as planned? And do you learn and grow from your mistakes and failures? (If you avoid taking action because you're afraid of failing, our article on Overcoming Fear of Failure can help you face your fears and move forward.)
As a successful entrepreneur, you'll have to work closely with people – this is where it is critical to be able to build great relationships with your team, customers, suppliers, shareholders, investors, and more.
Some people are more gifted in this area than others, but, fortunately, you can learn and improve these skills. The types of interpersonal skills you'll need include:
- Leadership and Motivation:Can you lead and motivate others to follow you and deliver your vision? And are you able to delegate work to others? As a successful entrepreneur, you'll have to depend on others to get beyond a very early stage in your business – there's just too much to do all on your own!
- Communication Skills:Are you competent with all types of communication ? You need to be able to communicate well to sell your vision of the future to investors, potential clients, team members, and more.
- Listening:Do you hear what others are telling you? Your ability to listen can make or break you as an entrepreneur. Make sure that you're skilled at active listening and empathetic listening.
- Personal Relations:Are you emotionally intelligent ? The higher your EI, the easier it will be for you to work with others. The good news is that you can improve your emotional intelligence!
- Negotiation:Are you a good negotiator ? Not only do you need to negotiate keen prices, you also need to be able to resolve differences between people in a positive, mutually beneficial way.
- Ethics:Do you deal with people based on respect, integrity , fairness, and truthfulness? Can you lead ethically ? You'll find it hard to build a happy, committed team if you deal with people – staff, customers or suppliers – in a shabby way.
You can improve your people skills further by taking our How Good Are Your People Skills? self-test.
Critical and Creative Thinking Skills
As an entrepreneur, you also need to come up with fresh ideas, and make good decisions about opportunities and potential projects.
Many people think that you're either born creative or you're not. However, creativity is a skill that you can develop if you invest the time and effort.
- Creative Thinking:Are you able to see situations from a variety of perspectives and come up with original ideas? (There are many creativity tools that will help you do this.)
- Problem Solving:How good are you at coming up with sound solutions to the problems you're facing? Tools such as Cause & Effect Analysis , the 5 Whys Technique, and CATWOE are just some of the problem-solving tools that you'll need to be familiar with.
- Recognizing Opportunities:Do you recognize opportunities when they present themselves? Can you spot a trend ? And are you able to create a plan to take advantage of the opportunities you identify?
You also need the practical skills and knowledge needed to produce goods or services effectively, and run a company.
- Goal Setting:Do you regularly set goals , create a plan to achieve them, and then carry out that plan?
- Planning and Organizing:Do you have the talents, skills, and abilities necessary to achieve your goals? Can you coordinate people to achieve these efficiently and effectively? (Here, effective project management skills are important, as are basic organization skills .) And do you know how to develop a coherent, well thought-through business plan , including developing and learning from appropriate financial forecasts ?
- Decision Making:How good are you at making decisions? Do you make them based on relevant information and by weighing the potential consequences? And are you confident in the decisions that you make?
- Core decision-making tools include Decision Tree Analysis, Grid
Analysis , and Six Thinking Hats .
- You need knowledge in several areas when starting or running a business. For instance:
- Business Knowledge:Do you have a good general knowledge of the main functional areas of a business (sales, marketing, finance, and operations), and are you able to operate or manage others in these areas with a reasonable degree of competence?
- Entrepreneurial Knowledge:Do you understand how entrepreneurs raise capital? And do you understand the sheer amount of experimentation and hard work that may be needed to find a business model that works for you?
- Opportunity-Specific Knowledge:Do you understand the market you're attempting to enter, and do you know what you need to do to bring your product or service to market?
- Venture-Specific Knowledge:Do you know what you need to do to make this type of business successful? And do you understand the specifics of the business that you want to start? (This is where it's often useful to work for a short time in a similar business.)
What Are The Most Important Skills Entrepreneurs Need?
Ten skills you need to have as an entrepreneur:
- Curiosity. Great entrepreneurs are tasked to discover new problems, reveal potential niche opportunities, refactor their original business process, and innovate. This is contingent on being passionate about different fields of study and business cases outside of one’s comfort zone.
- Time management. Careful priority planning, defining milestones, execution, and iteration are all important. None of that would lead toward progress without the right project management and time allocation methodology that gets the work done.
- Strategic thinking. Learning to decompose a problem to its core and reveal opportunities for growth. Figuring out creative solutions and identifying the low-hanging fruits. Defining the scope for an MVP and testing concepts within limited time and with a low budget.
- Efficiency. You need high performance when it comes to solving a problem. Applying the 80/20 rule and other techniques for yielding higher results in less time. Switching between different chores and progressing effectively day-to-day.
- Resilience. Handling rejections, stress, burnouts, lack of focus, slow progress. Determination and eagerness to fight the same dragon every morning are instrumental when it comes to building a business from scratch.
- Communication. Crisp and concise communication is paramount for each and every interaction with clients, partners, peers, clients, prospects.
- Networking. Growing a network facilitates business opportunities, partnership deals, finding subcontractors or future employees. It expands the horizons of PR and conveying the right message on all fronts.
- Finance. Finance management will make or break a business. Handling resources properly and carefully assessing investments compared to ROI is a solid requirement for entrepreneurs.
- Branding. Building a consistent personal and business brand tailored to the right audience. Igniting brand awareness in new verticals.
- Sales. Being comfortable doing outreach and creating new business opportunities. Finding the right sales channels that convert better and investing heavily in developing them. Building sales funnels and predictable revenue opportunities for growth.