Most people dream of owning a business, but fewer have the prerequisite skills. Sixty-three percent of people in their 20s either own their own business or want to start one, and 55 percent who aren’t already entrepreneurs hope to become one. But 25 percent of Americans who consider starting a business don’t follow through, and half who do start businesses fail within the first five years, Gallup polls show. Here are four of the key skills you need to succeed as an entrepreneur, along with some tips and resources for acquiring them.
Willingness to Take Calculated Risks
Of potential entrepreneurs who don’t follow through on starting a business, 84 percent say their biggest barrier is preferring the security of a steady income. Another 66 percent fear their odds of success are low. These obstacles reflect a fear of risk, pointing to one of the biggest keys to succeeding as an entrepreneur: willingness to take calculated risks.
Successful entrepreneurs know how to take calculated risks rather than reckless gambles. Green teaches a systematic approach to risk taking that helps take chance out of the equation.
Smart risk taking starts with identifying and assessing risks in order to weigh their pros and cons against those of potential opportunities. This should be followed up with careful planning in order to minimize risks prior to implementation. Ongoing monitoring and control will then help keep risks manageable. Learning how to take calculated risks by taking a course or reading up on SWOT analysis can help you become a smarter risk taker.
The next biggest reason Gallup respondents cited for failing to start a business was lack of personal financial resources. Lack of financing and cash-flow problems are perennial problems for start-ups, and succeeding as an entrepreneur requires learning to get past these obstacles.
While personal financial resources or loans from family and friends are some of the most common ways to get businesses started, the most successful entrepreneurs know how to tap into other sources of finance. Writing a financing plan, a key to any company’s success, should be part of creating your business plan.
The Small Business Administration provides online resources to help you write a solid business plan and understand and locate sources of financing, which include loans, grants and venture capital. Another excellent online resource is SCORE, where you can get paired with an experienced mentor to help you develop a realistic financing plan and network with potential financiers.
49 percent of would-be entrepreneurs say they have an idea but don’t know how to get started on turning it into a business, while another 29 percent say they have no knowledge of how to run a business. Acquiring business know-how is essential to surviving the start-up stage.
One solution to this is to get a formal business degree. You can also take business classes online from colleges that offer massive online open courses (MOOCs) or from resources such as the free Amway Education 80-course virtual curriculum.
Time Management Skills
47 percent of potential entrepreneurs worry that starting a business will negatively impact their life-work balance. Business owners put in an average of 52 hours of work a week, and 19 percent work 70 or more hours a week.
Developing effective time management skills can help address this problem. One proven approach to time management is creating a time budget. There are 168 hours in a week, which need to be divided between sleep, personal activities and work. Drawing up a time budget can help you keep your work hours in perspective and make them easier to manage. Time management author Laura Vanderkam provides online time management spreadsheets you can download, or you can use time management apps on your mobile device.
Automating business tasks through technology or outsourcing them can also save you time. For instance, one of the most time-consuming business tasks is bookkeeping. You can reduce the amount of time you spend on bookkeeping by syncing your business financial functions with a cloud-based accounting program or by outsourcing to an accounting firm.