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Essential Entrepreneurial Skills

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The Top 9 Essential Entrepreneurial Skills Every Business Owner Must Master

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05.05.23

Entrepreneurs significantly impact society and the economy through their innovative ventures. They contribute to the well-being of communities and nations in several ways, including creating employment opportunities, developing groundbreaking products or services, and enhancing the overall quality of life for people. The general population is frequently defined by consumerism; yet, there are certain characteristics that distinguish these producers, which we refer to as Entrepreneurial Skills.

For example, Ivan Zhao, a Chinese-born entrepreneur, recognized the need for a more unified and flexible productivity tool that would integrate note-taking, task management, collaboration, and document storage into one platform. In 2013, Zhao co-founded Notion with Simon Last, and together they started building the all-in-one workspace. Today, Notion has established itself as a leading productivity and collaboration tool in the market. The company has attracted millions of users worldwide, including individuals, teams, and organizations across various industries.

According to a Global Entrepreneurship Monitor (GEM) report, over 582 million people in the world are engaged in entrepreneurial activities, highlighting the importance of entrepreneurial skills in the global economy. So what are these so-called Entrepreneurial Skills, that empower individuals to turn their innovative ideas into profitable ventures and make a mark in the world?

1. Creative Problem Solving

To become an expert in creative problem-solving, you need to master the art of identifying and planning solutions to complex problems. It requires a balance of divergent (“outside the box” thinking without worrying about finding the “right” answer) and convergent thinking (narrowing down your options to find the best solution), as well as the ability to reframe problems as questions to unlock creative solutions.

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One example of creative problem-solving that changed the course of human history was the invention of the printing press by Johannes Gutenberg in the mid-15th century. Before this invention, books and other written works were laboriously copied by hand, usually by monks in monasteries. This process was slow, expensive, and prone to errors, which greatly limited the spread of information.

Gutenberg’s creative solution was to develop a machine that could mass-produce books through a process known as movable type printing. The printing press revolutionized the dissemination of knowledge and ideas at the time and facilitated the spread of scientific, philosophical, and religious works, contributing to intellectual and cultural movements such as the Renaissance and the Reformation. It also promoted literacy, as books became more affordable and accessible to the general public. Gutenberg’s creative problem-solving in the invention of the printing press transformed the way knowledge and ideas were shared, leading to widespread social, cultural, and intellectual changes that continue to shape our world today.

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Creative problem-solving is one of your main tools of innovation in identifying opportunities when traditional methods fall short.

Let’s put it into practice.

The Creative Problem Solving (CPS) Learner’s Model is a simplified version of the broader CPS process designed to make it more accessible for learners or those new to creative problem-solving. The development of the CPS process can be traced back to the work of Alex Osborn, an advertising executive who coined the term “brainstorming” and co-founded the Creative Education Foundation. Sidney Parnes, an academic researcher, later collaborated with Osborn to refine the process and develop a more structured methodology, which eventually evolved into the CPS model we know today. Here are the CPS steps:

  1. Clarify. The first step in the process is to clearly understand the problem or challenge. This involves identifying the issue, gathering relevant information, and defining the problem statement. In this stage, you ask open-ended questions and explore the problem from different perspectives.
  2. Ideate. Once the problem is well-defined, the ideation phase begins. This step encourages divergent thinking, where individuals or groups brainstorm and generate a wide range of possible ideas and solutions without judging them.
  3. Develop. In this stage, convergent thinking is employed to evaluate the ideas generated during the ideation phase. The most promising ideas are selected, refined, and developed further. This step often involves testing, analyzing, and adjusting the ideas to make them more practical, and feasible.
  4. Implement. The final step is to put the developed solution into action. This involves creating an action plan, assigning responsibilities, and monitoring the progress of the implementation. Then gather feedback and evaluate the success of the solution, making adjustments as needed to ensure the desired outcome is achieved.
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While the Creative Problem Solving (CPS) Learner’s Model can be helpful for entrepreneurs, there are other models specifically designed for entrepreneurship that might be more suitable. One such model is the Lean Startup Methodology, developed by Eric Ries. The Lean Startup model emphasizes rapid experimentation, customer feedback, and iterative development to help entrepreneurs build successful businesses with minimal risk.

  1. Build-Measure-Learn loop. The core concept of the Lean Startup is to quickly build a Minimum Viable Product (MVP), measure its performance through customer feedback and metrics, and learn from the data to iterate and improve the product. This allows you to continuously refine your products and services based on real-world scenarios.
  2. Validated learning. Meaning learning what works and what doesn’t through systematic experimentation and validation. Testing your hypotheses and assumptions, and making data-driven decisions, to minimize the risk of failure.
  3. Pivot or persevere. Based on the feedback and data you gathered, you now need to decide whether to pivot (change the direction of the business) or persevere (continue with the current approach).
  4. Customer development. The Lean Startup methodology emphasizes the importance of engaging with customers early and often. Customers should be able to engage with an unfinished product so that the finished one can be a result of their cumulative feedback.
  5. Innovation accounting. This principle encourages you to track and measure your progress using relevant metrics and indicators. This process allows for better decision-making, resource allocation, and overall business management.

2. Lifelong Learning

As you acquire new knowledge and expand your skill set, you become a more valuable asset to your organization. Fuel innovation by exploring new ideas and questioning existing assumptions. A curious mindset encourages creativity, which in turn leads to the development of cutting-edge products and services.

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Learning from Real World Experience

In the early 2000s, IBM faced stagnation as its mainframe computer and hardware businesses were struggling due to the rapid rise of personal computing and the internet. To survive and thrive, the company had to shift its focus toward newer technologies and services, such as cloud computing, artificial intelligence, and cybersecurity. IBM’s leadership recognized the importance of lifelong learning and invested heavily in employee training and skill development programs.

One of the key initiatives was the establishment of the “IBM Skills Academy,” which provided employees with access to various courses, training programs, and resources to improve their technical and professional skills. This commitment to learning enabled IBM employees to adapt to the dynamic tech marketplace and drive innovation in products and services. As a result, IBM was able to successfully transition from a hardware-centric business to a leader in software and services, contributing to its continued growth and competitiveness in the technology industry.

Curiosity

Two entrepreneurs, Travis Kalanick and Garrett Camp, had One snowy evening in Paris, they were struggling to hail a cab and started discussing the challenges of finding reliable transportation in big cities. Hmm … Their curiosity eventually led them to explore the idea of creating a service that would connect passengers with drivers using a smartphone app. With a keen interest in solving the problem, they returned to San Francisco and began working on their concept. They developed a prototype, tested it with a small group of users, and launched the first version of the app in 2010.

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Uber‘s success is a testament to the power of curiosity and its ability to spark innovation. Kalanick and Camp’s curiosity about improving urban transportation led them to create a groundbreaking service that has changed the way people travel and has inspired numerous other startups in the sharing economy.

Incorporate lessons from various aspects of life into your entrepreneurial pursuits. Expanding your knowledge and worldview through diverse sources of information equips you with the ability to synthesize situations and apply them to your business effectively. The key is to remain open-minded and continuously seek out new experiences and knowledge.

Books

Reading Books is unique and I included it cause I think it’s a way to learn from lifetimes of lessons, in just 1 or 2 months! A great read I’d recommend out of the top of my head is “Blink: The Power of Thinking Without Thinking” by Malcolm Gladwell. The book delves into the idea of “thin-slicing,” which is the ability to make quick, accurate decisions using minimal information. Gladwell examines how our subconscious mind processes information rapidly and often arrives at accurate conclusions without conscious deliberation.

The book highlights various examples from diverse fields, such as art, marketing, psychology, and law enforcement, demonstrating how experts rely on snap judgments and gut instincts to make important decisions. Gladwell also explores the potential pitfalls of thin-slicing, including how our unconscious biases can lead to faulty decisions.

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If you want to be a good business person, reading should be one of your habits. Refine your reading process through techniques like skimming and scanning to swiftly identify valuable information. And don’t read just business books try to draw inspiration from diverse disciplines, such as psychology, sociology, and economics, to unveil novel ideas and connect the dots. Periodically revisit your notes and distill overarching themes, cultivating a cohesive mental model.

3. Financial Mastery

You, my friend, are the proud owner of a small business. You’ve got the passion, the skills, and the determination to make it. But the cold obvious truth is this: without financial literacy, you’re fighting a losing battle.

Start by dissecting your financial statements. You’ve got three big players here: balance sheet, income statement, and cash flow statement. The balance sheet is your financial snapshot, showing your assets, liabilities, and equity. The income statement, or profit and loss statement, gives you the lowdown on your income, expenses, and profits. And the cash flow statement? That’s the lifeblood, tracking the ins and outs of your cash.

Now, don’t just stare at those numbers. Dive in, understand them, and use them to your advantage. You need to make decisions like a chess grandmaster, and that means knowing the financial implications of every move.

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Next up, bookkeeping. It’s not glamorous, but it’s essential. You can go old-school with spreadsheets, opt for a platform like Bench or Quickbooks Online, or hire a bookkeeper. Whichever route you choose, make it your mission to stay on top of your business’s financial health.

Budgeting is the cornerstone of any successful enterprise. Smart spending limits will help you plan for the present and the future. Scrutinize your spending habits, identify areas to cut back, and don’t be afraid to negotiate better deals with suppliers or vendors.

Let’s talk invoicing. You’ve got to get paid, right? Develop a foolproof invoicing strategy that keeps you on top of payments, tracks late fees, and sends automatic reminders. Online invoicing platforms like Wave, Bill.com, or QuickBooks Online are your allies here.

Build your business credit. It’s the key to unlocking financing and real estate opportunities down the line. Keep business and personal finances separate, incorporate your business, be smart with debt, and monitor your business credit score regularly. (We could delve into so much more here but we’ll catch up with you on it in a dedicated blog post).

In the meantime here are some more financial literacy resources:

4. Operational Expertise

Technical skills, indispensable to specific tasks, or a deep informational knowledge is usually what makes the business owner or the CEO the most powerful element of the business operation.

Business operational expertise refers to a combination of skills, knowledge, and experience that allow an individual to effectively manage and optimize the operational aspects of a business. The best way to build operational expertise is by getting hands-on experience in a business environment. Obviously, you have to understand the day-to-day operations and the challenges that arise in the company.

What’s not so obvious is that you can also seek out experts in your field or industry and learn from them directly. This will come naturally when hiring managers or expert employees. Operational expertise also requires effective leadership and communication skills as mentioned above to manage teams, set goals, and communicate effectively with stakeholders.

Get certified. Consider obtaining relevant certifications in your field or industry, such as Six Sigma or Lean Six Sigma, to demonstrate your expertise and credibility.

5. Persuasive Communication

If you can’t tell it or show it, how will you sell it? Mastering communication skills in the business world is essential for your professional success. Here are the elements of successful communication skills:

  • Active Listening. Engage in conversations by allowing pauses for interjections, repeating others’ words, and asking questions. Active listening demonstrates your openness to new ideas and fosters an environment of respect.
  • Emotional Intelligence. Develop your ability to understand and respond to others’ emotions, as well as your own. High emotional intelligence leads to more effective teamwork, improved conflict resolution, and greater empathy.
  • Verbal Skills. Communicate ideas, thoughts, opinions, and updates clearly and concisely. Effective verbal communication allows for in-person engagement and consensus-building among colleagues.
  • Interpersonal Skills. Build trust and strong relationships with stakeholders by connecting on a personal level, displaying empathy, and finding common ground.
  • Presentation Skills. Deliver engaging, motivating, and effective presentations by incorporating storytelling, data, and examples. A skilled presenter can influence audiences to take action or support a desired outcome.
  • Closing. Persuade others to pursue an idea, decision, action, product, or service. Closing a deal is the process of finalizing a transaction or agreement between parties, in a sales or negotiation context. This skill is almost an amalgamation of all the others.
  • Negotiation. Reach mutually beneficial solutions by understanding and leveraging the motivations of others. Aim for a win-win outcome that maintains positive relationships for future interactions.
  • Networking. Showcase your business value and build a robust network of connections. Attend industry events and conferences, Ask for introductions, Attend networking events, Host events, and so on.

6. Effective Writing

Effective writing is an essential skill for success in the business world. Whether you’re writing a memo to colleagues or an email to clients, your words can make or break a deal.

Let’s look at the 4 S’s:

Simplicity is the foundation of effective writing. Short sentences, familiar words, and clean syntax increase the brain’s processing fluency, making it easier for readers to understand your message. Avoid using nested clauses or the passive voice, as they can lead to comprehension mistakes and slower reading times.

Specificity is another essential element of effective writing. Specific language activates more neurons in the brain, causing it to process meaning more robustly. Use vivid and palpable language to make your message more memorable.

Non-Specific: “Something good happened today because of our marketing.”
Specific: “Our Company achieved a 20% increase in sales this quarter thanks to our new marketing strategy.”

Surprise is a powerful tool in effective writing. Our brains are wired to make predictions, so confirmations of readers’ guesses can be a bore. Surprise can make your message stick, helping readers learn and retain information. Unusual wordplay or unexpected endings can captivate your readers and make your writing stand out.

Smart thinking and making people feel smart can also improve your writing. Drawing fresh distinctions or phrasing pragmatic messages to evoke universal truths can create aha moments for readers. Social content and storytelling can also be powerful tools to connect with your readers on a deeper level.

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7. Empowering Leadership

Empowering leadership is a leadership style that focuses on giving employees the tools, resources, and autonomy needed to make decisions and take ownership of their work on their own. This type of leadership is characterized by trust, collaboration, and a willingness to empower others to succeed.

One example of a company that practices empowering leadership is Google. Google’s leaders encourage their employees to spend 20% of their time working on projects that interest them, even if those projects are not related to their job responsibilities. This approach has led to some of Google’s most innovative products, including Gmail and Google Maps.

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How to Empower Others

Autonomy. Give team members the freedom to make decisions and solve problems on their own. Encourage them to take calculated risks and learn from their mistakes.

Resources. Ensure that employees have access to the tools, information, and support they need to perform their tasks effectively.

Trust. Establish an environment where employees feel comfortable sharing their ideas and opinions, and where they trust that their colleagues and leaders will support them.

Reward. Celebrate individual and team accomplishments, and provide meaningful rewards and recognition for a job well done. This can boost morale and motivate employees to continue striving for excellence.

Mentorship. Pair employees with more experienced team members who can offer guidance, support, and advice.

8. Stress Resilience

Stress resilience in business refers to the ability of leaders and employees to adapt and thrive in the face of sudden “stress” like revenue going down, competitors accelerating, and dramatic changes in the industry and user needs.

When we come to actual Stress, which is a common experience in many workplaces, it can lead to burnout, decreased job satisfaction, and decreased productivity.

Here are some tips on how to apply stress resilience:

Encouraging open communication among team members and between employees and management can help identify problems early and facilitate effective problem-solving before they become bigger issues.

You can also promote work-life balance by offering flexible work hours, paid time off, and wellness programs which can help employees manage their stress levels and feel valued by their employer.

Providing resources for stress management, such as access to counseling services or workshops on stress reduction techniques, can also be helpful.

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Lastly, offering training and development opportunities can help employees improve their skills and knowledge, which can boost their confidence and reduce stress caused by feelings of inadequacy. By implementing these strategies, businesses can create a stress-free environment that benefits both employees and the overall success of the company.

Lead by example. Leaders can model stress resilience by taking care of their own well-being and encouraging their employees to do the same. This can help to create a culture of well-being and resilience in the workplace.

One example of a company that promotes stress resilience is Starbucks. Starbucks offers its employees a range of benefits, including healthcare, mental health services, and tuition reimbursement. This support can help employees to manage workplace stressors and maintain their well-being.

9. Producerism

Producerism is a philosophy that emphasizes the importance of producing goods and services, rather than just consuming them. I read this concept in the book: The Millionaire Fastlane. In the context of business, producerism can be a useful mindset for entrepreneurs who are looking to come up with a business idea and succeed in the marketplace.

How to Embrace Producerism

Here are some insights on how producerism can help with coming up with a business idea and succeeding:

  1. Need. The first principle is to identify a real need in the marketplace that you can fulfill. People that solve real problems or provide value to customers are more likely to succeed than those that don’t.
  2. Entry. The second principle is to find a way to enter the market that is hard to enter in a fast, efficient, and scalable way. The author suggests looking for ways to leverage technology, automation, and other tools to make your business more in tune with the industry.
  3. Control. The third principle is to maintain control of your business and your financial future. The author argues that you should avoid situations where you are dependent on others for your income or success.
  4. Scale. The fourth principle is to scale your business and your income by finding ways to reach more customers, create more value, and increase your revenue and profits.
  5. Time. The final principle is to focus on building a business that allows you to enjoy your time and freedom. The author suggests looking for ways to automate or delegate tasks so that you can focus on the things that you enjoy and that are most important to you.

A famous example of a successful business that embodies producerism is Apple. Although the company has been criticized for its design choices that prioritize aesthetics over functionality. Apple is known for its focus on creating innovative and high-quality products, which has earned the company a loyal customer base. Apple’s success is largely due to its focus on creating high-quality, innovative products.

Why Does Entrepreneurial Skills Matter?

Entrepreneurial skills matter because they’re like the secret sauce that makes a business go from meh to amazing. Having these skills helps you identify opportunities, solve problems, and make smart decisions that lead to growth worth the till. If you become good at things like problem-solving, leadership, time management, and communication, you can deal with all the ups and downs of running a business.

Entrepreneurial Skills also puts you in the shoes of the customer and allow you to experience your own product/service. For technology startups, entrepreneurial skills are also essential for attracting talent and securing funding. Investors are looking for founders who can demonstrate a clear vision, a deep understanding of their market, and the ability to execute their plans.

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The top essential entrepreneurial skills every business owner must master include Creative Problem-Solving, learning & leadership, time management, communication, financial management, marketing, and networking skills, just to name a few. These skills are crucial for the success of any business owner and can be honed through practice and experience.

If you’re interested in further reading? We’ve got you covered:

  • A Guide to Entrepreneurial Skills: Definition and Examples: Indeed
  • 7 ways to proactively develop your entrepreneurial skills: HULT Business School
  • Entrepreneurial skills: Definition by UNESCO
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