Run down this checklist before you start your own business.
I am often asked by would-be entrepreneurs and start-up business owners what skills and abilities they need to develop to truly succeed in business. That’s always a tough question to answer. I have always believed that aspiring entrepreneurs need to learn as much as they can about everything and anything that has to do with business in order for them to really succeed.
That said, there are two main skills you need to cultivate and acquire to be a great entrepreneur along with five others you need to focus on to really give you a sense of what it’s like to successfully run a business:
1. Become a generalist: While there is a drive toward specialisation in every area of our lives, the person who commands armies is called a General. Being a generalist allows you to have a lot of flexibility as a business owner. It means you have to know the fundamentals of how business works, as well as how all independent parts work together to create success.
2. Know the numbers – yours and everyone else’s: Numbers are and can be a great motivational force in your business and your life. Numbers are also the language of business, so you need to become fluent in them and familiarise yourself with a number of different formulas and key benchmarks if you want your business to be successful.
What are some key numbers you need to know and learn? You should start by knowing the size of your targeted market, the number of companies currently competing in that space, the types of revenues they are generating and the kind of profit margins they are currently running.
Also remember in any start-up, expenses are usually 30 to 35 per cent more than expected and revenues are always less than planned. Adjust accordingly and be prepared to alter your plans if the numbers don’t add up.
3. Treat your present job like an apprenticeship to being an entrepreneur: Your best friend in your current job is time. Use it to leverage your knowledge of what works, and learn as much as you can about what drives sales and profits, because those are lessons you can use at some point in the future.
What can you learn in your current position that will help you down the road? What don’t you know about your current company’s operations that you could learn in terms of sales, marketing or accounting that could broaden your understanding of business generally?
4. Work more jobs: Would you open a restaurant for the first time without ever working in a restaurant? Maybe you would not, but I know people who did. And the results were not very good. To avoid this fate, find ways to work in the type of business you are thinking of starting.
Besides, who do you think would bring more experience to their particular enterprise: the person who only worked one job in one industry, or the person who worked in 10? Business, at its core, is a numbers game. The more you can make the numbers work in your favour, the better your chances of success.
5. Learn the value of Systems: Systems are the key to creating better and more profitable businesses. Until you learn how to systemise fundamental processes, you will forever be reinventing the wheel, be it in your current job or in your business.
This can take the form of anything from a script for answering phones to your overall sales and marketing processes. While these are vital to understand and key to success, it’s also important to get familiar with hard systems and technical systems like phone systems and IT and Internet configurations.
6. Get good at sales: In business, nothing happens until a sale is made. If you are the owner of the company, you will be expected to generate sales. Sure, you can hire out this function but my experience has shown that at least initially, your customers are going to want to first buy from you.
7. Learn the rules: You cannot play a good game if you do not know the rules or the objective of your game. So get some grounding in the legal aspects of business, forming your own business, tax codes, licensing requirements and jurisdictions.
While there are a number of other things you need to learn and adopt to succeed in business, these seven are a good place to start.
There are few truly new things under the sun. So build on the intellectual capital of those who have gone before you. And it’s more valuable now than ever before.