7 essential skills for small business owners
When I was at school, I was taught a lot about trigonometry, geography, Australian history, physics, chemistry… and not a single thing about managing money – let alone running a business.
When asked in MYOB’s latest monthly SME Snapshot if today’s education system gave children the skills they need to run their own business, 66% of respondents disagreed (some strongly).
Like most small business owners, my business lessons were learned at the school of life. On the job. The hard way.
In fact, I didn’t even own a cheque book (remember those, kids?) until I started my business.
So – what skills do you need to run a successful SME? Here are just a few:
Absolutely critical. The best and worst of business is caused by communication – for customers, team members, suppliers and joint venture (JV) partners. Get it right, and your team will all be on the same page, charging together towards a common goal. Customers know the terms of your relationship, get no nasty surprises, value what you do for them, and feel valued. Suppliers and JV partners feel respected and connected.
Mess it up, and team members become staff, switch off, work for themselves, and do just what’s expected (and no more). Customers feel like a number, and are no longer advocates for your business. JV partners work with your competitors.
This goes without saying. It’s about bringing your people along with you – not forcing them. Leaders inspire by painting a vivid picture of where you want to get to, and providing a clear plan of action for how you’ll achieve it. Leaders use goodwill and enthusiasm as their motivation tools. Where a manager takes credit, places blame, and says my way or the highway, a leader gives credit, takes blame, and says let’s go together.
Strategist / Executor.
Business owners wear many hats – we sometimes need to think as shareholders, and other times as directors (or employees). But even before that, there’s another duality we need to master: strategist and executor.
The strategist needs to clearly articulate where the business is heading, and how you’ll get there, so that you can inspire others along on the journey. A key part of this is first understanding your purpose (mission statement), core values (what you stand for) and your why (why you do what you do).
The executor needs to make the strategy happen. This covers all the operational activities you need to get stuff done. Critical to these are your people – having the right mix of talent and experience to cover the service and budget needs of your customers. They then need clear, documented processes to follow, and the necessary training and mentoring to execute correctly. Finally, you need to develop a robust culture that embodies and embeds the beliefs and actions you want your people to exhibit.
Many business owners get frustrated because the business relies on them too much. No one could possibly care more, know more, or do a better job than they do. They make the mistake of thinking they’re indispensable to their business – and will therefore be forever trapped in a cage of their own making.
If you can show a little modesty – accept that your business doesn’t revolve around you, and that with the right training, mentoring and processes, someone could eventually fill your shoes – you’ll free yourself up to enjoy greater lifestyle flexibility, and also to work more strategically on your business.
Don’t try to be everything to your business. Get the right people involved – whether team members, or expert business advisers – and you’ll have a much greater chance of success.
This is also a critical step in building a business that’s highly sellable.
It takes cojones to leave the security of a weekly wage and go into business. It’s tough out there. Many fall by the wayside. You need to be tough and resilient to survive – but above all, smart. Sometimes, the bravest act a business owner can do is to let go. Involve good people, and listen to experts who have a proven track record of helping businesses succeed.
I believe you need a powerful motivator to succeed. If you can understand yours – whether financial, lifestyle, achievement, or you just want to change the world – you’ll be far more effective (and satisfied).
Growing up, my dad had a powerful enough motivator: he lost his business – everything – but rather than drop his bundle, he did whatever it took to provide for his family. He worked his backside off, and today is one of our more successful clients. It was the most powerful business lesson I’ve ever had, and has got me where I am today.
Why did you go into business? To get a greater financial reward for your efforts, to enjoy a more flexible lifestyle, to be the boss and call the shots, to make a difference… or a combination?
So, how’s that working out for you?
With all the pressure and competing demands on your time, it can be easy to lose sight of why you went into business in the first place: financial rewards, lifestyle freedom, a sense of achievement.
You need to remain focused on what you’re about, and where you want to get to. Cloud accounting tools are critical in giving you accurate, real-time information that you can then use to track progress to your goals. And of course, your business adviser plays a vital role in helping you interpret these figures (so you can take corrective action), and by holding you accountable (to ensure you do what you say).