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What does it take to be successful running your own business?
Becoming an entrepreneur might be the most challenging endeavor you embark upon.
In order to become successful at it, you will need to acquire and hone several skills.
As a business owner, you are going to be a master of yourself, and that means that you are going to need skills vastly different from those of an employee.
Along the way, you will need to develop yourself and become a multifaceted individual.
This is a never ending, life-long process and every day you need to ask in front of the mirror:
“How can I become better today?”
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In a rapidly changing world, here are the most important areas you should focus on for success.
1) Social Skills
As an entrepreneur, business owner and leader, you have several lines of communication. At the other end of the line, there are always people that interact with you, whether those are customers, clients, employees, partners, fans or even haters.
Communicating effectively with all these people means that your social skills have to be fully developed. You need to understand how human nature works and how to properly interact and engage with other individuals.
Even if you are an introverted geek who only likes to deal with computers and technology, you need to be able to express yourself, your ideas and your value proposition in a clear and concise way, whether the medium of communication is text, audio, video or real life dialogue.
2) Team Building
The world of business is a tough one, and trying to fight all your battles alone will not get you very far. You need to attract and surround yourself with other professionals that will assist you in specific tasks and projects.
Don’t fall into the trap of believing that nobody can do it as well as you do and that you should do everything yourself. This is shortsighted thinking.
The most successful entrepreneurs are those that have built a strong team of highly capable people around them. More often than not, the members of the entrepreneur’s team are smarter and more competent in specific skills than the entrepreneur himself.
Recruiting people and building a team are difficult challenges. Start slowly and then expand as your business grows.
This is a concept and skill that people that are employees or self-employed totally miss.
Wealth is built using leverage!
In order to accomplish great things and achieve success, you are going to need some form of leverage.
Now, don’t misunderstand, I am not talking about financial leverage, i.e. borrowing money to invest in your business. This has its place and can be beneficial too, but I am referring to the overall concept of multiplying your output and impact.
Leverage can be built in various ways and might take various forms. It can be an amazing team, an effective sales process, proprietary technology, a large following, connections with other outstanding entrepreneurs and more.
The bottom line is that as human beings we are entities of limited scale, thus we must leverage our efforts in order to become highly successful.
Following my point above, you need to understand that during the day, we have limited and finite energy and time. Human beings do not scale well.
It is imperative then that we accomplish as much as possible during a specific period of time. This is where productivity fits in.
Most people work in a way that is highly unproductive and inefficient. It almost hurts my soul to see it. In today’s competitive business landscape, you have a severe handicap unless you are working in an effective and efficient manner.
High productivity is predicated on a daily ritual that is structured based on your goals and outcomes you wish to achieve.
As business philosopher Jim Rohn said:
“Either you run the day or the day runs you.”
Except for having a solid daily routine geared towards getting stuff done, you should also be aware of various productivity tips like working on one and only one task each time, eliminating all kinds of distractions, and outsourcing and delegating the low level tasks (see how a great team fits in).
5) Energy Management
Interrelated with the point above is the skill of managing your energy throughout the day. You need to take care of your body and mind so that those get you through the exhausting and harsh days.
First of all, you need to take care of yourself as a biological machine. Eat well, rest properly, get hydrated. Yes, we start with the fundamentals, since most people do not even handle those.
Then you need to go along with your body rhythms. If you are a morning person, try to wake up early (before everyone else) and do your most impactful work then, leaving the less important tasks for the afternoon. If you are a night owl, do the opposite.
Whenever possible, take breaks where you get some light physical exercise, preferably somewhere near nature. This will revitalize you and help you march forward when you resume working.
6) Finance & Accounting
This one always befuddles me. Business owners think that they do not need to spend time on understanding finance and accounting in general, and their company’s financial statements in particular.
They believe that this is the job of their accountant, and they assume that if sales are coming in, everything is going fine.
This mindset is totally wrong and can be lethally risky.
How can you be certain that your business model is correct if you do not understand the fundamental mechanics of how business works?
And how can you be certain that your business is operated properly if you do not evaluate its financial performance by checking the relevant statements?
If you do not know your numbers, you do not know your business. Period.
All in all, you need to take the time to study how finance and accounting work, and always make sure that you are tracking and monitoring the most critical numbers for your business.
7) Money Management
In the same spirit, another fundamental skill you need to master as a business owner and entrepreneur is that of managing money.
Money management is based on a mindset that dictates that money should be used in a way that yields the highest value possible for any amount spent.
Whether it is about your personal finances or your company’s finances, you need to be in charge of your money. This includes, but is not limited to, monitoring income, tracking expenses, budgeting, banking operations, taxes and more.
Lots of businesses fail because of their owners’ inability to properly manage money, for example by running out of cash or by piling up insane amounts of debt.
8) Capital Allocation
One of the most advanced skills to develop is that of capital allocation, meaning the process of how you divide the resources of your business to different processes, departments and projects.
As you understand, it is your goal as an entrepreneur to optimize capital allocation so that as much profit as possible is generated by your business. That profit should not necessarily be generated in the short term, but eventually, the goal should be value and wealth maximization.
Now, except for the most prominent form of capital (financial capital, i.e. money), I also mean all types of capital. Those may include social capital (the social networks you have built), human capital (the workforce that you have recruited and employ), intellectual capital (any patents, trademarks and intellectual property you own), and more.
Another one that makes me wonder. Why do people stop learning? It is a common pattern that graduation also brings the end of education.
When you stop learning, you stop growing. And if you are not growing, you’re dying.
Especially as an entrepreneur, it is even more crucial to always be learning. In this era of high-paced business, you cannot afford to be left behind on this field.
Just look at what successful people do. From Bill Gates to Warren Buffett, and Elon Musk to Richard Branson, great people put such a high value on increasing their knowledge.
And here is another excellent quote by Jim Rohn to highlight this point:
“Formal education will make you a living; self-education will make you a fortune.”
Personally, I allocate almost one third of my “work time” into educating myself, either via books, articles, video courses or webinars. Do not underestimate the long term impact of compounded knowledge.
10) Marketing & Sales
Today’s business world is insanely crowded. The only way to stand out is by having great marketing.
At the same time, people have more choices than ever. And the only way to actually grab a piece of their spending power is by being great at sales.
For some reason however, a lot of entrepreneurs think of marketing and sales as something of lesser importance, and something that should be an afterthought. Especially those having a more technical background tend to dismiss these two absolutely critical pieces of a business’s success.
Look, having an awesome product means nothing if nobody knows about it. On top of that, it is not uncommon that inferior products actually grab a larger market share than better competitors, just because of superior marketing.
Great businesses are always based on tremendous marketing, and outstanding entrepreneurs are almost always skillful sales people too.
Building up on my first point of having solid social skills, as an entrepreneur you also should be adept at networking. This involves finding, meeting, collaborating and partnering with other capable business owners.
Now, I am not talking about just attending a few conferences here and there, giving away your business card and waiting for a miracle. I am talking about building long term, real life relationships with people that you respect and would love to work with and share ideas.
Walking the entrepreneurial road alone will not get you far. After some point, you are going to hit a ceiling, either in your business or your personal capabilities. That is why you need to surround yourself with other entrepreneurs who will help you to get to the next level.
Networking and building trust are very long processes so you need to start it early and essentially never stop it. The return on your time and energy investment are going to be so large though, that it will be totally worth it!
12) Seeing the Future
I know what you are thinking:
“If I could see the future, I would already be a billionaire.”
In reality, seeing the future is impossible. Even predicting part of it is actually insanely hard.
So when I talk about “seeing the future”, I actually refer to being able to spot trends and large movements in business, economy and society.
See if you could answer the following questions with an emphatic “Yes” or “No”.
Will Internet usage continue to grow the following years?
Will Brick and Mortar retail struggle during the years to come?
Will robots continue to replace humans in low-level, manual tasks?
See what I mean? Those are not that difficult to predict.
By being able to recognize mega-trends or even smaller scale trends within your industry, you will be well positioned to capitalize on those and profit from being early on the cycle.
Stay up to date by reading business, industry related and other news, increase your knowledge by constantly educating yourself, and soon you will be able to spot trends way before the general public does so.
As I mentioned before, the marketplace is more crowded than ever, and it will continue to get more cramped (see, that’s a trend).
Thus, the only way to stand out is by building a brand, something that goes hand in hand with the marketing skill we discussed above.
The official definition of the word “brand” is the following:
“A brand is a distinguishing symbol, mark, logo, name, word, sentence or a combination of these items that companies use to distinguish their product from others in the market.”
That is a bit stiff though, so I prefer the following one from Billionaire Jeff Bezos, founder of Amazon.com:
“Your brand is what other people say about you when you’re not in the room.”
As you understand, your company or product’s brand is shaped by every micro-transaction and every micro-interaction that you have with your customers and prospective customers.
A trust for a brand is slowly built for years (even decades), yet can be destroyed in a matter of seconds.
Without one, you are going to be just another mediocre product in the market. Remember:
You are either a brand or a commodity.
Before wrapping this point up, I want to make some special mention to Personal Branding, i.e. the branding that accompanies an individual like you and me.
As you might have guessed, it is extremely crucial to start building and shaping your own personal brand.
Having a strong personal brand as an entrepreneur and business owner is a form of leverage, something that goes a long way. From business development to networking, a recognizable personal brand will help you in ways that you cannot even imagine.
Three of the most important jobs of an entrepreneur and business owner is having and shaping a vision for the business, accumulating the resources that will enable that vision, and finally recruiting the team and attracting the talent that will execute towards that.
Thus, as a business leader it is immensely important to be able to develop a strategic plan that will take your business to the next level, and also articulate that plan properly to your team.
Thinking strategically though is not something that comes easily. By building up experience in business and leadership, and perhaps making some mistakes occasionally, you can start thinking in a more strategic way. This will enable you to not just focus on the near term, but think several moves ahead.
Studying other great leaders is also a phenomenal way to hone your strategic skills. From Rockefeller to Carnegie, and from Sam Walton to Michael Dell, the lives of those extraordinary men offer several lessons in strategy and planning.
Finally, one fundamental skill you need to have as an entrepreneur in the 21st century is understanding technology. Proliferation of technology is a massive, unstoppable trend that is going to change the way we live and do business in the following years.
There are major forces in play: Machine Learning, Artificial Intelligence, Big Data, Internet of Things, Renewable Energy, and many many many more. Each one of those on each own can profoundly impact our lives in ways we cannot even imagine.
Of course, it is impossible to be an expert in all these fields. But being able to understand the basics of technology and keeping up with the latest trends will give you a powerful competitive advantage both in business and in life overall.
The average person is clueless about technology and about what is coming. Break that ignorance in your life by constantly learning and educating yourself (see how all these skills intermingle).
Being an entrepreneur is a tough proposition and a full time job. In order to increase your chances of success, you need to develop and hone several skills.
Here is again my list with the most important ones:
1) Social Skills
2) Team Building
5) Energy Management
6) Finance & Accounting
7) Money Management
8) Capital Allocation
10) Marketing & Sales
12) Seeing the Future
Now that is a large list for sure. But do not let that intimidate or discourage you.
First of all, becoming successful in a field (e.g. entrepreneurship) is a long term endeavour (think in terms of years and even decades). It is going to take time. Just preserve and keep going.
Second, those skills are totally interconnected, and slowly becoming good at one, will allow you to ramp up your capabilities in another area.
For example, by increasing your productivity and energy management, you will be able to accomplish more in less time, thus saving you time to allocate on learning.
By developing your social skills, you will be able to network more effectively and leverage your connections to have better results.
In this installment, I laid out 15 skills that I believe that are the most important ones to have as an entrepreneur. Cultivate those constantly and see your results grow exponentially over time.