What Are 5 Skills Every Entrepreneur Should Have?
An entrepreneur refers to someone who builds or operates their own business. By having an equity stake in the firm, the entrepreneur can enjoy a great deal of profit if things go well; but, they also take on a great deal of risk—far more than a regular employee of the business. This entrepreneurial risk can take several forms, including financial risk, career risk, emotional risk, or overall business risk.
Since there is so much at stake when it comes to starting and growing a successful business, there are very specific skills that an entrepreneur usually needs to be successful. Below, we highlight five such attributes.
- Entrepreneurship can be quite rewarding, but also comes with several unique risks.
- To mitigate the risk of financial loss or failure, it serves a business owner to have a certain set of skills.
- A great entrepreneur must be able to effectively communicate, sell, focus, learn, and strategize.
- An ability to continuously learn is not just a key entrepreneurial skill, but also a very valuable life skill.
- Growing a business requires a sound strategy based on inherent business sense and skills.
Understanding Entrepreneurial Skills
Entrepreneurs play a key role in any economy, using the skills and initiative necessary to anticipate needs and bringing good new ideas to market. Entrepreneurship that proves to be successful in taking on the risks of creating a startup is rewarded with profits, fame, and continued growth opportunities. Entrepreneurship that fails results in losses and less prevalence in the markets for those involved.
While the prospect of becoming your own boss and raking in a fortune is alluring to entrepreneurial dreamers, the possible downside to hanging one’s own shingle is vast. Income isn’t guaranteed, employer-sponsored benefits go by the wayside, and when your business loses money, your personal assets can take a hit; not just a corporation’s bottom line. But adhering to a few tried and true principles can go a long way in diffusing risk. The following are a few characteristics required to be a successful entrepreneur.
Every entrepreneur needs to be an effective communicator. Whether a person is a solo entrepreneur or runs a Fortune 500 company, they need to understand how to communicate effectively to all stakeholders and potential stakeholders that touch the business.
It is imperative for an entrepreneur to be able to communicate with employees, investors, customers, creditors, peers, and mentors. If an entrepreneur cannot communicate the value of their company, it’s unlikely the company will be successful.
They also need to master all forms of communication, including one-on-one and in-person conversations, group conversations, written communication, and email or online messages.
The soft skill of sales goes hand-in-hand with the communication necessary to be successful. As an entrepreneur, this person needs to be able to sell anything and everything. An entrepreneur needs to sell the business idea to potential investors, the product or service to customers, and themselves to employees.
If an entrepreneur is able to communicate effectively, they are better equipped to sell their ideas and physical products.
In the beginning, it's natural for entrepreneurs to be the first salespeople at their respective companies. Those sales skills are necessary to demonstrate value for all stakeholders inside and outside the company.
The path to successful entrepreneurship is riddled with ups and downs. There are the highs of successes and the despairs of setbacks. A successful entrepreneur needs to be able to focus so they can stay the course when the going gets tough.
One of the main risks an entrepreneur faces is the risk of emotional instability
This skill can also be thought of as thinking with the end in mind. No matter what struggles an entrepreneur goes through, a successful entrepreneur has the focus necessary to keep an unwavering eye on the end goal and can push himself to achieve it.
4. Ability to Learn
The ability to learn is one of the most important skills to have in life, let alone in entrepreneurship. If someone is building a business, however, the ability to learn is required for success.
The ups and downs an entrepreneur goes through are unavoidable. An entrepreneur needs a high ability to learn—and a desire to learn. If a person is able to learn in any situation, even failure, they have the skills necessary to become a successful entrepreneur. Failure can help expand one's knowledge and understanding of business.
The percentage of new businesses that fail within their first 10 years, per the Small Business Administration.
5. Business Strategy
While a successful entrepreneur has, by definition, built a successful company, the skill of business strategy is actually the fifth most important skill that an entrepreneur needs. Often, entrepreneurs achieve success in their businesses through their own sheer strength of will.
By employing effective communication skills, sales skills, a deep focus, and a high ability to learn, an entrepreneur can actually learn a business strategy on the fly. When structuring and growing a business, however, it's important that the structure and growth strategy is based on sound business sense and skills. A successful entrepreneur needs to have a solid strategy to take their business from good to great.
Entrepreneurial Education and Career Outlook
Some of the skills needed to be a successful entrepreneur are likely to be innate or natural. Others can be hones through training and education in business and management. A masters in business administration (MBA) is a common route. MBA coursework involves a broad spectrum of business-related topics including accounting, statistics, economics, communications, management, and entrepreneurship. MBA programs not only prepare students to work for financial institutions, but they also prepare them for management positions or as founders of startup companies.
If you think you have what it takes to be a successful entrepreneur, keep in mind that even great ideas and solid management teams can fail due to the whims of the market, stiff competition, or just bad luck. In 2019, the failure rate of startups was around 90%. Research concludes 21.5% of startups fail in the first year, 30% in the second year, 50% in the fifth year, and 70% in their 10th year. But don't let these statistics discourage you: if at first, you don't succeed, try again.
Entrepreneurial Skills FAQs
What Are the Most Important Skills for a Successful Entrepreneur?
While there is no magic formula for beings a successful entrepreneur, those who do succeed tend to have mastered the following set of skills: good and effective communication; being able to sell both themselves and their idea or product; strong focus; eagerness to learn and be flexible; and a solid business plan.
What Are the Personal Qualities of a Good Entrepreneur?
In addition to honing one's skills, personal qualities (or so-called "soft skills") also matter a great deal. Being likeable and friendly helps—nobody wants to partner with somebody who is difficult to work with. Being creative, versatile, and resilient in the face of great challenges all also help.
What Are the Most Important Skills in Business?
Once a business is up and running, be a good manager and having a good business sense and money-savvy is crucial. Many otherwise good companies fail due to poor leadership, mismanagement of cash, or poor management. Having a business strategy in place from the get-go and sticking to it is crucial.