Top Ten Must-Have Skills Every Entrepreneur Needs Part 1
This article is broken into two distinct parts and will be published a day or so apart. It is done so for the sake of publishing. Email the author for a complete version if you so desire.
Part One of Two
Like a toolbox full of items, skill sets are what’s used to build a successful business. There are those out in my audience that may think differently about the coming list, but it dawned on me many years ago that even though the names of the skill sets required to be successful as an entrepreneur may be different, they mean the same thing.
It is my solemn belief that these are mandated skill sets; that is, they either are present in the entrepreneurs themselves, or exist in the key staff or stakeholders the entrepreneurs employ. Regardless of where they lie, these skills should be developed, honed, improved and cultivated to reach the lofty goals of success as an entrepreneur.
1. Succession Planning
2. Life - Work Balance
3. Open- Mindedness
4. Talent Management
5. Conversion- Ideas to Action
9. Financial Acumen
10. Generalist Management
1. Start With the End in Mind
After all, what are you trying to get out of becoming an entrepreneur? Most entrepreneurs actively work in the business concept; it’s their baby.They hatched the idea, converted it into a living, breathing entity, and it was because of their effort, investment, expertise (and luck), so it goes without saying. What they often fail to think about, or at least not commit to paper, is what their intentions are once the business is up and running. Some entrepreneurs are design, build, sell types of entrepreneurs, so their goals often get met within the first couple of years. Then it’s on to the next idea.
What do you do when it comes to retirement? Who will succeed you? Should you pass the business on to an heir, or sell the business outright? These are all questions that need to be answered prior to starting on a new enterprise. It isn’t glamorous like birthing a new idea, or securing the first level of financing, but this skill is the most important step in the organization of a new concept.
The majority of entrepreneurs grow the business to a level that it might produce decent revenues, maybe even a nice profit, but it slightly more than owning a job. At the conclusion of their working within the business, they either merely cease operations; allow a friend or relative to run it or some other form of transfer.
The goal in developing an entrepreneurial endeavor is to grow the business to self-sustainability, revenues in the millions, and a clear path to long term success. That is on which we need to focus our attention.
If the goal is to “build a nest egg for retirement,” you should lay out a plan to do so. What happens if the business really does become successful? That is a question many entrepreneurs don’t know how to answer. No, really. They do all this work trying to make the business into a real entity, and then when it finally takes off, they are dumbfounded and lost. I have seen many companies go from nothing to $4-5 Million in annual revenues. Once hitting that plateau, they tumble to non-existence within a year or two. Fear of failure is the buzz term, but the fear of succeeding is more prevalent, but seldom verbalized.
Leaders with a certain amount of ability are fully capable of managing their endeavor, but only to a certain point. It is fact that different revenue levels require different levels of skill. You might be able to understand everything about business, but do you know what to do when faced with a hostile takeover, or a merger, or going public or any other new set of issues? Not necessarily.
Entrepreneurs generally fall into two categories, at least in my experience. They are either great “idea generators” or “action heroes.” The rare entrepreneur is both, and has the ability to gather the skill sets for success in partners, key staff or stakeholders that fill all of the necessary requirements for assured success.
The first ones, the idea generators, are terrific at thinking up new concepts, better ways of getting it done, are quick to offer their opinion and often suffer from some form of attention deficit syndrome (not scientifically, but it seems like it). I like to call it Selective Attention. They get out-of-their-mind excited when they come up with a new idea, but move on to the next one as soon as they get bored with it. That’s often the reason why emerging enterprises never seem to make it over the revenue hurdles to become profitable and sustainable.
The second, the action heroes, are the entrepreneurs that get excited about the parts of the business of which they are good. An example of what I mean is a Contractor. The contractor in this entrepreneur loves to do the architectural planning, writing the specifications, planning the interior finishes, but is burned out from doing the actual construction. He hires tradesmen to perform the physical tasks of pouring the concrete, putting on the roof, laying the bricks, etc. He can’t afford to hire (or partner with) a sound CPA, so he settles for an accounting major from the local community college to “do the books.” Do you see where I am headed with this example? They can be extremely busy, work long hours but not accomplishing the growth of the business.
2. Successful at Home; Happy at Work
Your life and your work are intertwined, and therefore each requires attention. When one is out of adjustment, and unequal in emotion to the other, difficulties in both will emerge. I called this topic Life and Work Balance, but balance conjures up a scale, like the blindfolded goddess with the scales of justice upheld, with opposing elements under evaluation. Your personal life and your entrepreneurial endeavors are not opposing elements, not should they ever be. I choose to refer to this situation as a blend of purposes; one completely intertwined and whole, resembling a braided rope. Independent cords wound together to form an extremely strong blend, resulting in an item individual to itself.
If you have a significant other, such as a spouse, partner, a complete family, or those that are close to you, they should never have to suffer as a result of your going into business. Done well, those closest to you should be in full agreement of the newly planned venture, or you will never have harmony in that part of your life. Occasionally, an entrepreneur will have a temporary setback and have to “stay late at the office,” but substitute family time should be scheduled to make up for it. Routine late nights, long weekends at work and unrelenting stress of never being home will destroy a relationship. Even the most rock-solid of marriages have fallen apart because the scales were tipped to one side for too long; the rope of the tug of war beginning to unravel.
Your children will certainly need you to parent them, regardless of age. If they live under your roof or under your purview, they need the influence of a caring parent. All too often entrepreneurs get so involved in their venture that they begin to ignore everything and everyone that is not directly in front of them, so family, the home front and everything else is forgotten. There comes a point in time that ignoring them becomes rote, and resentment and apathy toward you will grow until it breaks the silence with controversy.
3. Constant Learning
Entrepreneurs need to be open to new things; to embrace the unknown and master it. Things you never thought of will come up during the formative phase of the emergence of your endeavor, so don’t shy away from them. It is easy to delegate responsibilities to others, but when it comes down to “getting it done” there is only one person ultimately responsible. If there is no one to delegate the unsavory or difficult tasks to, you need to be ready, willing and able to tackle the subject, learning as quickly and thoroughly as possible that skill that is required.
It’s easy to get bogged down in the day to day, with your head down, trudging forward. It is also easy to lose sight of what is really important; filling all the squares. When gaps occur and there is no one to hand off the next cog being placed into the machine which is your new venture, you need to do whatever is needed to gain the knowledge, accomplish the task, and keep the project moving forward.
Having trouble concentrating? Then step away from the project for a short time and clear your head. Take a day off and do something that is little stress, a place of quiet or something physical. I recommend picking up a book, finding a quiet corner and taking your mind completely off the business. Pick up a copy of Dickens, or Austen, Bronte or Tolstoy, maybe the Bible or Koran, or any other type of spiritual belief material; anything other than a business journal. The classics are a departure from the every day, and offer insights into life through other’s eyes. That’s why more and more scholars recommend a liberal arts education for the first years of college. How can anyone learn anything about life if they don’t study how is has been lived in times past? You can’t learn management in school, it has to be learned by putting theory into action, repeatedly. A Bachelor’s Degree in management doesn’t make any sense to me. Listen to classical music, read the classics, and gain that generalist’s outlook on the world to regain your focus and recharge the batteries.
4. All Things H.R.
The ability to search out the finest candidate for a particular responsibility is crucial to the success of an organization. It is always best to find three of the best people in the area that you can afford. Sometimes, if the upside potential of the venture is quite positive, it may be able to hire or acquire the absolute sharpest talent in the nation/world, even if you can’t pay them what they are worth to bring them on board. You may not have the cash on hand, but you do have tremendous potential, and can offer them a base and stock options, percentage of the company, or some combination of base salary, stock appreciation rights, commission and benefit package that can persuade the top talent to work with you instead of for you. Venture capitalists are great sources for top talent, as they will prefer to place their key people into the organization to protect their financial interests in the investment. Don’t be afraid to approach VC’s when it comes to sourcing executive talent.
One of the things I recommend to my clients when hiring is to take their time. Hire slow, fire fast is my talent mantra. Take the time to fully investigate references, delve into the prospective hire’s former company, perform a background check, drug screen, and ask the person to sigh a non-disclosure, non-compete agreement once you actually decide to hire them. If there comes a point that the person doesn’t work out, or you discover that something attested to during the hiring process is false, dismiss (fire) them immediately.
There is a multitude of labor laws, both state and federal, and deserve your adherence. Companies with less than fifty employees have a different set of laws to comply with than companies with more than fifty, so if you plan to grow above that headcount, you may want to structure your company under the more stringent labor laws, saving time and retraining, revision of handbooks and policies later. It is better to over-comply than it is to get caught short. Fines, penalties and government oversight are not comfortable or inexpensive with which to contend.
When it comes to motivation, senior executives don’t need much of it. They are accustomed to performing their jobs, know what is expected, but may need some encouragement to stick to the message (Mission and Vision) when communicating with subordinate staff. As for line workers (when you get to the point of having them), a positive, employee focused set of motivators need to be in place from the onset. Today’s young workforces are more interested in quality of life than they are with compensation. They may not want to devote their entire waking moments to “the job” but they do want to excel.
5. Conversion: Ideas into Action
The ability to turn ideas into real products or services is paramount to a successful business. All too often the new entrepreneur has a terrific idea, sits on it so long that someone else thinks of the same thing and makes a million dollars. The newbie pouts, sulks and blames the world for working against him/her, never realizing that an ideas float around the universe constantly, landing in more than one place. Those who have the ability to take immediate action often are those who are deemed “lucky” or “genius” individuals. The truth is that they aren’t any luckier, smarter or blessed than anyone else, they know the value of action. These successful individuals have the knack of converting ideas, thoughts and “old to new” products or services into viable, profitable entities.
Not only is the conversion of ideas into action relative to products or services, conversion of the energy of subordinates is just as valuable. By incentivizing subordinate staff, business partners and any other stakeholders, the positive energy you bring to the idea or concept will become incrementally greater
Author – David J Dunworth is a business consultant to the entrepreneur and emerging enterprise sectors, and is the Chief Executive Officer of TeXT-Icon Mobile Marketing Communications (www.TeXT-Icon.com), a full service marketing company. For additional information, see his blog at http://www.theovercaffeinatedentrepreneur.wordpress.com.
Serial entrepreneur with too many projects and too little time or caffeine. I also write a blog found at:www.theovercaffeinatedentrepreneur.wordpress.com