With is in mind we thought it worth considering the essential skills for all business owners and we have arrived at 5 broad areas:
1. Understanding and communicating to what motivates your customer.
This of course is Sales and Marketing – knowing who your customer is, what they want, what is important to them, understanding how people make choices, how to manage the conversations that lead to a sale.
A business starts in the mind of its customers. This is not only about giving people what they want but also understanding human psychology in all its irrational glory.
2. Building systems and processes.
This skill is most closely associated with production, getting the people and resources all in the right place at the right time to deliver your service or product and doing it quickly and efficiently.
However the skill really applies to every department of business and most importantly of all to the business as a whole. The business is a system or machine and each little piece of it needs a certain amount of resource at just the right time.
Getting all the architecture in place so that each piece of the business machine delivers what is required in time, is a major part of having a successful business. The marketing mechanism must feed the production mechanism all supported by the admin, the HR, the facilities mechanisms. Fail to put any piece of the machine in place, fail to maintain it or fail to provide it with the resource it needs and the business breaks down.
It is about seeing the whole, being organised, finding solutions and tinkering to get the system running well.
3. Managing Risk.
Given that there is no profit without risk, business requires risk.
On the other hand we need to understand how to manage risk and mitigate it where possible. We need to know when something is too risky to do and when something is a great bet. We will have to look ahead to see risks and opportunities emerging which means planning and thinking through the consequences to actions.
At the heart of this skill is a process called ‘due diligence’, which may involve drawing up cash-flow forecasts, budgeting, planning our marketing and operations.
4. Managing people.
Only tiny businesses can operate without a team. Part of building systems and processes almost inevitably leads to managing people and whilst we might like our staff to behave like automatons we know they do not. If we want to be responsible for a successful business system we need to get to grips with how to deliver results in collaboration with others.
This means we need to understand what motivates people, how to ensure that they deliver. There is a skill in knowing what can and cannot be managed in people and hiring and firing accordingly. And once we have the basics in place we can explore the vast and highly skilled world of getting the best out of people.
Finally in this area of skill, and perhaps most difficult of all, we need to manage ourselves, understanding our own motivations, strengths, weaknesses and foibles, especially since as business owners we have most influence of anyone in our business.
5. Working with and understanding numbers.
Running through everything in business is a need to work with numbers. Obviously it is most prominently in building systems and managing risk, but there are few business HR departments or Marketing Departments that do not use numbers.
A facility and ease with using numbers, reading the story behind them, is an essential part of a business managers life. At a higher level, an ability to segment and analyse the results you are getting can open up enormous possibilities for a business.
So there we have our five areas of skill. All comments and feedback are gratefully received below.
Finally it is perhaps worth remembering that skill is a mixture of knowledge and experience. So perhaps underpinning every business is a willingness on the part of its founder or current leader, to learn combined with an appetite to step into the unknown which is what is required to gain experience.