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Written by: James Ponds
While anyone can start a new business at any time, not everyone can keep one in operation. Most new startups fail within five years, and while there may be many factors contributing to their eventual downfall, in some cases business owners just do not have the necessary skills to cope with the challenges that often arise with running a business and guiding the venture through them.
You do not necessarily need to have a degree in business administration to own and operate your own company. However, you do have to find some way to learn the necessary skills. The first step is to identify the skills you need to have a chance at success when running a business.
1. Negotiation Skills
Negotiation is a fancy term that just means coming to an agreement with somebody else. Most people negotiate on an informal basis every day, perhaps without even realizing it. However, successful negotiation in business requires more formal proceedings. If you attempt informal negotiation, it may appear that you don't really know what you're doing. You may need to take negotiation training to learn the formal techniques commonly used in the business world.
2. Analytical Skills
To analyze something is to take it apart—figuratively if not literally—and study it to try to learn as much as you can about it. It may be a tangible thing or it may be a problem or an idea. Analytical skills are important in business at all times, but especially when you are first starting out. You have to be able to identify what you want to accomplish in the business, assess your current situation, and make plans to take your business from where it is now to where you want it to go. This requires some detailed analysis.
3. Communication Skills
Good communication skills are vital in almost all areas of business, so much so that it can be easy to take them for granted. When you hire new employees, you have to be able to communicate clearly what is expected of them, and you also have to be able to understand their questions and concerns. Even if you run the business entirely on your own, which is common when you first start out, you still have to communicate with customers, as well as suppliers and other business associates. Communication skills include negotiation skills, but negotiation skills are not all the communication skills you need to have.
4. Delegation Skills
Once your business has become successful enough for you to hire help in the form of employees, you have to be able to assign them certain responsibilities. This is called delegation. Another aspect of delegation is, once everyone has their assignments, to provide them adequate space in which to do the work. In other words, don't hover over them micromanaging every step, but also don't abandon them when they may need help. It can take time to learn how to provide just the right amount of supervision without impeding the work. Employee feedback can be very helpful in determining which interventions are welcome and which are not.
5. Financial Management Skills
Making money is a large part of the purpose of running a business in the first place, so it makes sense that you need an understanding of finances. Specifically, you need to be able to keep records of your income and your expenditures so that you can balance one against the other. You want your income to exceed your expenditures rather than the other way around, or you will go into debt rather than making a profit.
6. General Management Skills
General management starts with having a goal. It then involves coordinating activities and marshaling resources in an effort to meet that goal. Management involves obtaining resources and then deploying them in a directed fashion in service of the overall objective.
In some cases, business skills overlap with one another. For example, communication skills include negotiation skills, leadership skills include delegation skills, and it could be argued that general management is a big umbrella that includes all the others.