While many small business owners have an abundance of passion, they often lack practical business skills. Nearly half of new businesses fail in the first five years and about 65 percent fail in the first 10 years, according to data from the U.S. Bureau of Labor Statistics. To prevent your business from being part of those statistics, you need to understand the skills you already have and which you must learn or delegate to others.
Here are the essential soft skills (people skills or anything that is not a technical skill) you will need to learn to succeed in your business.
The business skills you need to master
To succeed as an entrepreneur and leader, you need a variety of skills. You must delegate effectively, communicate well, negotiate and plan strategically, lead and build teams, think analytically, market and sell effectively and manage finances, cash flow and your time. The following business skills will help you achieve your career goals:
Delegation involves assigning responsibility to other people for the completion of work. The ideal position that you want to obtain is one where your staff carries out all the routine activities of your business. Effective delegation involves achieving the correct balance between controls and allowing people to complete their job. The key element is knowing how to make your business work, rather than your business working you!
Communication is an important part of life and is one that is often taken for granted. When you think about it, almost everything you do requires improved communication. To be effective in business, you have to communicate well. When you hire a new employee, good communication skills help you select the right person. When you speak with your various stakeholders, you need to be clear about your expectations and to be sensitive when dealing with problems. The key is to know how to communicate your vision effectively with passion and conviction.
>> Learn More: Technology Should Enhance Communication Skills
Almost everyone negotiates informally on a daily basis without being aware of it. Formal negotiation is a skill that can be learned through experience and practice. People who negotiate frequently tend to be more skilled at it than people who have not participated in many formal/informal negotiations. Experienced people are more likely to know what to say, when or when not to say it or when not to make concessions. The key is to know how to develop a win-win approach in negotiations with all parties while keeping in mind that you also want to obtain the most favorable outcome possible for yourself.
Strategic planning is an important business activity. Strategic planning is a process of defining your company’s strategy or direction and making decisions on allocations of resources of capital and people. The key is to know how to protect your company’s future performance, within a three- to five-year framework or more, supported by your well-defined business plan.
Leadership is a process of getting things done by people. Leadership, a critical management skill, is the ability to motivate a group of people toward a common goal. Leadership is also the ability to take charge, assemble, mobilize and motivate teams. The key is to know how to forge long-term relationships with prospects, customers, suppliers, employees and investors.
Team-building and teamwork skills are essential for an entrepreneur in today’s workplace. People working to their potential in teams generate better solutions and more productivity than individual members working independently. The key is to know how to build teams of employees, partners, advisors and investors that will help you take your business to the next level.
Today’s workplace is becoming more technologically advanced and complex. With this rapid increase of technology, the need for analytical thinking also increases. Analytical thinking is the ability to assess your business’ present state objectively, determine where you want to be in the future and what to do to close the gap between your business’ present and future growth. The key is knowing how to gather, review and evaluate data necessary to formulate and express compelling arguments.
Sales and marketing skills
Establishing successful sales and marketing methods and policies — from pricing and advertising to sales techniques — are essential in growing your business. The ability to analyze your competition, the marketplace and industry trends are critical to the development of your marketing strategy. The key is to know how to craft and communicate a compelling message to the right target audience that generates new business and builds profitable revenue streams.
General management skills
Management involves leading a group of one or more people for the purpose of coordinating activities that will accomplish a goal. Management encompasses the deployment and direction of human, financial and technological resources. The key is to know how to develop and implement a workable management system that will oversee daily operations, nurture stakeholders and support business growth.
Cash flow management and financial management are two different skills. Cash flow involves keeping track of the money moving through your business while financial management requires a more big-picture approach.
Cash flow management skills
Cash flow generally is acknowledged as the single most pressing concern of small and medium-sized businesses. In its simplest form, cash flow is the movement of money in and out of your business. Cash flow is the lifeblood of all growing businesses and is the primary indicator of business health. The effect of cash flow is real, immediate and, if mismanaged, totally unforgiving. The key is to know how to monitor, protect, control and put cash to work. [See our reviews of the best accounting software to help you manage your cash flow.]
Financial management skills
The activity of finance is the application of a set of techniques that individuals and businesses use to manage their money, particularly the differences between income and expenditure and the risks of their investments. The need for timely budgeting and reporting of financial performance is of the utmost importance. The key is to know how to interpret and analyze your financial statements in such a way as to identify the items that are adversely affecting your profitability.
Time management skills
Time management is a set of related common-sense skills that help you use your time in the most effective and productive way. Time management is an important skill to master. Learning this skill will empower you to achieve more and to use your time wisely. The key is to know how to manage your time efficiently and to focus on the activities most likely to deliver value to your business.
You don’t have to become stagnant once you land a job or even if you’re the boss. The workplace is always changing and you should be too. Keep track of skills that are new or uncomfortable for you; that can be a to-do list for your growth.