Running a business requires a great variety of skills, and you probably don’t have them all. In this article, the foremost skills needed are highlighted. If you don’t have them, or are weak in any of them, be sure to find a partner or top manager who can help fill the gaps.
You may be able to afford to hire a good assistant who can organize your office for you, but if you’re just starting a business, that’s not likely the case. If you haven’t already done this in previous jobs, you need to get very good at preparing correspondence with your customers and vendors, invoicing and billing, collecting and tracking customer payments, and all the other tasks that an office manager, secretary, and bookkeeper might do in a large business.
You also need to keep your filing up to date so you know which bills you’ve paid, which customers have paid you, as well as all the details you’ll need to file all the federal, state, and local government reports, including tax returns. Administrative skills are not the glamorous part of owning your own business, but they’re certainly critical ones.
All small-business owners will need to make decisions every day, probably numerous times per day. You need to be able to make sound decisions quickly, constantly, and under pressure. You’re the boss, so you need to be able to act correctly and independently. There won’t be anyone else you can lean on for their opinion. While you can seek advice from employees or business advisers, such as accountants and lawyers, ultimately you’re the one that must be able to make the right decisions for your business.
Unless you’re professionally trained as an accountant, you will most likely hire someone to do the financial statements for you, but that person won’t take on the daily responsibilities of keeping your business’s books. You could hire a bookkeeper when you can afford one to take care of the daily tasks, but you always want to keep on top of those books to avoid potential fraud or theft. As a business owner, you never want to turn your books over to someone else, unless it’s a close family member or partner, without maintaining strong controls.
You also need to be good at managing cash flow and making sure you’ll have enough money on hand to meet your bills. Vendors will quickly cut you off if they don’t get paid, which can shut your business down.
Before you spend any money, you should know how to analyze the benefits of that expense to your business and whether that expense will ultimately add to your ability to make a profit. If you’re not sure, take the time to analyze the expense further, and don’t rush to make a financial decision until you are certain you know its ramifications for your business.
Specific skills cannot be listed here, but it is imperative that you should be knowledgeable and be sure you have the specific skills for the industry in which you plan to run your business. For example, if you’re planning to buy or start a restaurant, you need to have many different industry-specific skills. You must know how to cook everything on your menu even if you plan to hire a chef.Remember that your chef could get sick or quit abruptly and you’ll have to do the cooking to keep the business open.
You must know how to hire and manage servers to be sure your customers are getting the service you expect them to get. You must understand the technical aspects of buying your food for the restaurant, so you get the quality of food you want, when you want it, and at the best price.
For whatever business you’re thinking of starting or buying, write down all the specific knowledge and skills you might need and either learn to do them yourself or find a partner who can fill any gaps. Only a partner will put in the time, effort, and dedication that you’ll need to get a business off the ground and keep it going.
Can you work with all different types of people and manage what they do?
A business owner must be good at developing working relationships with all kinds of people, including employees, customers, vendors, bankers, and professionals.
You must be good at recognizing an individual’s idiosyncrasies and learn to use them to get what you want. Just about every day your business is open you will be faced with a demanding customer or a cranky employee. Frequently, you need to deal with an unreliable vendor. Can you handle the pressure and get even difficult people to work for you and do what you want?
Physical and Emotional Stamina
Running your own business can be very demanding both physically and emotionally. Do you have the stamina to handle the pressure? You will likely face 12-hour days (or more), six or seven days a week, as a business owner. Be sure you are ready to handle that both emotionally and physically.
You must be a good problem solver. As a business owner, that will be one of your primary jobs. Everyone, including employees, vendors, and customers, will be bringing their problems to you. You need to be able to work with them to develop a solution quickly and move on.
You can’t afford to tie yourself down to researching one solution and implementing it, while the rest of your business goes down the toilet. You must be able to either come up with a solution quickly, or know how, and to whom, you can designate responsibility to solve that problem.
If you are running the business all by yourself, you need to carefully manage your time and be sure you don’t spend too much time solving one problem while ten others sit there waiting for a solution.
Every business owner must be good at self-motivation. You won’t have anyone telling you what to do next. You must be good at developing your own to-do list and working through that list to get things done as quickly as possible.
Everything that needs to get done for your business must be done by you, from finding funding and developing your product, to developing a marketing plan and making sales. You will be the only one creating plans and altering those plans as you test various business theories. You need to know when something is working and when it’s not, so you can quickly make adjustments and get the business back on track.
You must have a great deal of self-confidence in your abilities and you must know where you want the business to be in the next year or the next five years.
Sales and Marketing
The two most important skills for any business owner are sales and marketing. If you’re not good at these two things, don’t even try to start a business unless you find a partner who is. You could develop the greatest product or service in the world, but if you don’t know how to attract and keep customers, your business will fail.
You must spend time developing your marketing plan, including identifying your target audience and how you will reach them. You must know who your competition is and how you will sell against that competition to convince people that your product or service is the best to buy. If you’re opening a retail store, you must come up with a marketing plan that will differentiate your store from other similar stores.
As you review all the skills you need, you’ll probably think to yourself, “How can I possibly do all that in one day?” Well you can’t. Good time management is knowing what you need to do yourself and what you can ask someone else to do for you.
In some cases, you may be able to pass the task on to an employee or ask a vendor’s representative to do the task for you. You may decide you need to hire a professional – accountant, lawyer, consultant, or other specialist – to take care of some tasks for you, so you can spend time doing the other things you must do yourself.
If you’re running a one-person business, you must put together a to-do list in the morning of all the things that must get done that day; prioritize that list and realize that some things just won’t get done because of other problems or emergencies that will come your way. You must be able to multitask and keep a bunch of balls bouncing in the air at all times. As you find a few quiet minutes here and there throughout the day, get something else done on your list.
You also must be good at separating your work life from your home life, even if your business is in your home. You can’t spend 100 percent of your time and effort on your business and ignore the needs of your family and friends. Not only will it be bad for you emotionally and physically, it can also destroy your relations with your family and friends, support that you’ll need to keep yourself going.