Budding entrepreneurs have to first realise that they cannot achieve their dreams by themselves.
Entrepreneurs have existed for hundreds of years, even though entrepreneurship as a discipline is of recent vintage.
Although management education over the past 100 years has focused on educating corporate managers, the policymakers and business schools over the past quarter century have come to recognise the contribution made by the entrepreneur to innovation, job creation and wealth creation.
Entrepreneurship is now the fastest-growing subject discipline in business schools worldwide.
The academic community has tried to find out more about the entrepreneur, especially what makes an entrepreneur. In the end, they have had to reluctantly admit that there is no one personality type that makes up the entrepreneurial character.
But what is known is that entrepreneurs behave in similar ways across the globe. They are passionate about their ventures, willing to take risks, optimistic, persuasive, visionary, creative and have a great deal of perseverance.
More recently academics have concluded that the best way to study entrepreneurs is to focus on what successful entrepreneurs do; that is, what makes up best practice within an entrepreneurial activity.
How can the 21st-century entrepreneur best develop their professional skills? Where should they focus their limited time and energy?
From personal experience and from talking to many entrepreneurs and educators, I have set out below what I believe are the 10 most important skills that the young entrepreneur should develop. This is by no means an exhaustive list, but these skills will substantially improve the probability of success of an entrepreneur.
- Lifelong learning
Why: Before an entrepreneur can even start their development, they must accept that they cannot be good at everything and know everything.
How: Not only should the entrepreneur take advantage of the educational opportunities that are available, they should seek out experienced entrepreneurs who can contribute to their learning.
Great entrepreneurs are like sponges - they are always learning, always asking questions and always willing to change direction if someone has a better solution.
- Basic business skills
Why: Business knowledge provides a platform for a lifetime of entrepreneurial activity.
How: Make sure that the learning is of good quality and relevant to the industry. Ask experienced entrepreneurs for advice on reading material and education programmes.
There is no substitute for learning the basics of business. This includes subjects such as basic marketing, cash management, cost management, performance evaluation, legal obligations and people management. Many people go into business because they are great at what they do, but know nothing about how to operate a business.
- Learn to evaluate opportunities
Why: Without a profit there is no long-term resilience in a business.
How: Before embarking on a new venture and throwing hard-earned savings at it, use evaluation models to test the worth of any new venture.
Too many people go into business because they have a business idea and are passionate about it, but neglect to undertake basic research on whether it can create a viable, profitable venture. Business failure rates are high for new ventures because the business idea failed to satisfy some basic venture attributes.
For a venture to survive and be successful the product or service requires a compelling need for sufficient numbers of identifiable and reachable customers that are willing and able to pay for it at a price that makes it a worthwhile venture. It is remarkable how many new ventures fail to satisfy these basic criteria.
- Build a great team
Why: It is through the combined efforts of the team that entrepreneurs achieve their personal successes.
How: The successful entrepreneur learns how to select and motivate the best people.
An entrepreneurial venture is an organisation, not a person. It involves more people than just the entrepreneur. Successful entrepreneurs know what they are good at and where they have weaknesses, and are willing to involve other people in managing the enterprise.
- Communication skills
Why: Stakeholders will not embrace concepts they do not easily understand.
How: Successful entrepreneurs are able to sell the simplicity of the concept, and do it quickly.
While entrepreneurs are naturally persuasive, there are skills in negotiating and presenting that can be learnt.
- Build strategic relationships
Why: Networking can bring new clients, but it is also an imperative to assist the entrepreneur's continual learning.
How: Networking is simply about taking the time to meet other people that can help an entrepreneur develop.
Successful entrepreneurs understand how to connect with people and how to use the skills and resources of individuals and organisations to help them achieve their objectives. Emerging businesses simply do not have the resources or market reach to do everything themselves. Working with larger organisations can help them with technology, knowledge and distribution channels to broaden their own capabilities.
- Embrace technology
Why: The ability to adopt and use the variety of technology tools available has a direct effect on the bottom line.
How: Young entrepreneurs need to be well versed in the new language of technology.
Technology is simply about productivity, whether it is on the plant floor or in the office. To compete, entrepreneurs need to have the best technology that they can afford and learn to use it to its maximum advantage.
- Manage risk
Why: The more an entrepreneur can uncover and validate their business assumptions, the less likely they are to be exposed to uncertainty in a business venture.
How: Successful entrepreneurs project what can go wrong with a venture, mitigate the risk wherever possible, and only proceed if the worst-case situation is an acceptable level of risk.
Entrepreneurs have a greater tolerance for risk than the average person. Perhaps this is often because they do not see the risks in a venture. They are generally optimistic, believe they can solve any problems that come along and leap into the dark. Successful entrepreneurs, however, take calculated risks. They need to be good at project management, scenario analysis and market research.
- Develop an international perspective
Why: Catering to international markets ensures growth.
How: Companies need to be willing to see the global market as the source of revenue.
An emerging business has its greatest chance of survival and growth if it solves a complex problem for a clearly identified niche market.
But in any market there is likely to be a limit to the number of potential customers who are willing and able to purchase a specialised product. So it is necessary to look internationally to find the potential market needed to build a substantial venture.
Also, by taking an international perspective, the entrepreneur has the greatest chance of either developing the business to the size necessary to take it public or bring it to the notice of a global corporation that wants to exploit the potential.
- Share the rewards
Why: The entrepreneurs' success comes from the achievements of those around them.
How: Successful entrepreneurs understand the need to not only share the rewards to encourage motivation, but also to share the equity with those who create wealth for the venture founders.
Ultimately the success of the enterprise will be dependent on the efforts of many people. There are many ways that you can do this within your venture: sharing equity, offering options, distributing profits and providing bonuses and rewards.
The key is to ensure that those who help create the wealth feel that their contribution has been recognised. This makes them willing and active supporters in the activities needed to build a great company.
The professional entrepreneur is an educated, self-learning individual who applies known best practice to their entrepreneurial venture.
Although we all acknowledge that the best entrepreneurs have an underlying talent for creative business solutions, the smart ones will freely acknowledge that they would have been better off if they had taken the time to develop some basic entrepreneurial skills early in their careers.
Buy Tom McKaskill’s Audio Seminar CD from the Resource Centre:
An Inside View Of The Life Of An Entrepreneur