Introduction to Entrepreneurial Skills

Like all my articles, this will be presented as a training course style. More pictures and less wording.

Introduction - Case Study.

Sarah Smith has been working as a Graphic Designer for the past decade.

She has extensive experience in his field and has been employed with leading designing firms. While being employed with different firms, she has created large graphic design projects for several esteemed clients.

All her clients were extremely very happy with Sarah’s work and she developed a great rapport with her clients.

In fact, several of his clients, as well as Sarah’s friends, advised her that she should start a graphic designing firm of her own.

Sarah started to think about venturing out on her own. Soon, she started her own Graphic and Web Designing firm, Dreamz Designs.

Sarah had high hopes from her business and hoped to gain a large client base by the end of the first year of starting her new business. She was able to gain large and prestigious projects from some clients.

However, just after six months of operation of her business, Sarah found that there was something which was wrong. Although Dreamz Designs had been able to bag large projects, her firm had just scraped through in completing the projects.

In fact, in some of the projects, she had faced financial losses due to not meeting the deadlines. Hence, as per the contract, Sarah had to pay penalties for delays in the project completion than what was promised and decided upon.

Also, Sarah realized that she was unable to take care of all that entails being an entrepreneur.

You can understand here that being an employee and being your own boss and starting a business entails completely different sets of skills and mind-sets.

Hence, it is crucial that before you venture out in starting your own business, you carefully analyze your skills. After analysis, you must decide whether you possess the necessary entrepreneurial skills or not and if not then at least try to develop these skills.

So, it is crucial that each entrepreneur possesses and develops these entrepreneurial skills.

Let us learn about ‘Introduction to Entrepreneurial Skills’ in detail.

Objective:

1. Define an Entrepreneur
2. Explain the Characteristics of Effective Entrepreneurs
3. Explain the Key Entrepreneurial Skills
4. Explain the Key Reasons for Failure of Entrepreneurs
5. Tips for Becoming a Successful Entrepreneur

Let's get started.

1. Define an Entrepreneur

An entrepreneur is someone who develops a business model, acquires the necessary physical and human capital to start a new venture, and operationalizes it and is responsible for its success or failure.

An entrepreneur responsible for success or failure is distinct from the professional manager in the sense that the former either invests his or her own resources or raises capital from external sources and thus takes the blame for the failure as well as reaps the rewards in case of success.

• Whereas, the professional manager does the job and the work assigned to him or her for a monetary consideration.
• In other words, the entrepreneur is the risk-taker and an innovator in addition to being a creator of new enterprises whereas the professional manager is simply the executor.

Benefits of Entrepreneurial Skills

There are several ways in which the right entrepreneurial skills may benefit the entrepreneur as well as his organization, such as follows:

• Entrepreneurial Skills greatly enhances performance.
• It increases the overall success of the company.
• It enhances and leads to a heightened level of accountability in the entrepreneur for the entire organization.
• It greatly boosts and improves company culture and subordinate morale.
• Reduces chances of failure and to keep the organization up with changing times.
• Right entrepreneurial skills create an enhanced support system for the entrepreneur to work in.

2. Explain the Characteristics of Effective Entrepreneurs

An entrepreneur should have an ideal goal in mind which proposes a future better than the status quo. Followers will be greatly influenced and be motivated by the extraordinary vision of a visionary entrepreneur.

The following are the traits or characteristics of effective entrepreneurs:

VISION: An entrepreneur should state in clear terms the vision in such a way that it is understandable to others. This articulation demonstrates an understanding of the employees’ needs and hence acts as a motivating force.

ENVIRONMENTAL SENSITIVITY: An entrepreneur should be sensitive to the environment and should always make realistic assessments of the environmental constraints and resources that are required to bring about change.

SELF-CONFIDENCE: An entrepreneur should be self-confident and have complete confidence in his judgment and ability.

STRONG CONVICTION ABOUT VISION: An entrepreneur should be strongly committed towards his vision and willing to take on high personal risk, incur high costs, and engage in self-sacrifice to achieve his vision.

EXTRAORDINARY PERSONALITY: Effective entrepreneurs have a behavior that is unique, novel, unconventional, and counter to norms. Such behaviors evoke surprise and admiration in people around him.

INFLUENCE AND LEAD CHANGE: Effective entrepreneurs have to act as a change agent and should evoke radical change rather than just act as caretakers of the status quo.

3. Explain the Key Entrepreneurial Skills

FILLER.....

There are two main types of key Entrepreneurial Skills:

• PERSONAL SKILLS
• INTERPERSONAL SKILLS

Some of the Key personal skills are numerous but the most prevalent ones are:

• Developing Self-awareness
• Managing Stress
• Problem Solving Skills

Not only the mentioned skills are necessary but also the following Strategic Skills are paramount.

A few main qualities required for entrepreneurs to act as effective strategic leaders are as follows:

LOYALTY: Entrepreneurs as strategic leaders demonstrate their loyalty to their vision by their words and actions.

OUTLOOK: Have wider perspective/outlook - Entrepreneurs as strategic leaders just don’t have skills in their narrow specialty but they have a little knowledge about a lot of things.

MOTIVATION: Entrepreneurs as strategic leaders must have a zeal for work that goes beyond money and power and has an inclination to achieve goals with energy and determination.

KEEPING THEMSELVES UPDATES - Entrepreneurs as strategic leaders keep themselves updated about what is happening within their organization. They use various formal and informal sources of information in the organization.

ARTICULACY: Entrepreneurs as strategic leaders are articulate enough to communicate the vision of where the organization should head.

SELF-AWARENESS: They must have the potential to understand their own moods and emotions, as well as their impact on others.

READINESS TO DELEGATE: Entrepreneurs as strategic leaders are proficient at delegation. They are aware of the fact that delegation will avoid overloading of responsibilities.

CAREFUL USE OF POWER: Entrepreneurs as strategic leaders make very wise use of their power. They must play the power game skilfully and try to develop consent for their ideas rather than forcing their ideas upon others.

SOCIAL SKILLS: Entrepreneurs as strategic leaders must be friendly and social.

4. Key Reasons for Failure of Entrepreneurs

Let’s look at the key reasons why entrepreneurs fail. All these reasons have the common theme of not managing the venture successfully and being lax or lazy as far as the nuts and bolts of managing the venture are concerned.

Further, the other theme that runs through these reasons is missing the trees for the forest or not paying enough attention to details and at the same time, missing the forest for the trees or getting too bogged down in the details that the big picture is ignored.

Some of the key reasons for the failure of Entrepreneurs are:

Let's go in detail with each.

Problems with Funding

The first of these reasons relate to the funding aspect. As we all know, new ventures and start-ups need funding at all stages of their lifecycle and hence, the entrepreneur has to ensure that the venture capitalists and the financial institutions back him or her from the word go and continue their assistance throughout the process.

Often, it is the case that entrepreneurs fail to follow through as the idea which looks good initially fails to generate revenue or business leading to the venture capitalists developing cold feet and backing out from the venture.

Apart from this, it is also the case that some start-ups and their founders do not anticipate the continuous cash flow that is needed to keep the venture afloat.

Staffing Issues

The second reason why entrepreneurs fail is related to staffing wherein the entrepreneurs often do not staff their ventures with the right resources and often fail to have the required resources when the venture takes off.

For instance, in these days, it is the case that the ventures need enough resources when the projects roll in or when business picks up. On the other hand, having too many resources is also a drag on the venture as resources cost money and time to maintain.

Further, not having the right resources because either they are too expensive or they do not want to take the chance of working for a start-up. Indeed, gone are the heady days of the dotcom boom when just everyone and everybody wanted to work for a start-up.

Nowadays, many employees do not want to risk their futures by joining a start-up whose future is uncertain.

Cash Crunch and Drying up of Liquidity

The third reason why new ventures fail is related to the financials or the managing of the cash flows which have been mentioned earlier.

This aspect has to do with the fact that most entrepreneurs fail to anticipate the cash crunch which arises from the imbalance between accounts payable and the accounts receivables.

Further, it is often the case that new ventures budget for revenues in the future now and this means that unless the revenues materialize, the venture would run out of cash. Moreover, it is also the case that the funding from the venture capitalists might dry up suddenly leading to liquidity problems.

Indeed, though the venture might postpone receivables to the future, it cannot do the same with the payables wherein suppliers, staff, and vendors cannot be assured that the entrepreneur would honor the commitments.

Operational Mismanagement

The fourth reason why new ventures fail is the operational aspect wherein the entrepreneur fails to manage the nuts and bolts of running the business in an effective, efficient, and efficacious manner.

For instance, many entrepreneurs often do not involve themselves in the ground realities of running the business and leave this to others wherein they concentrate on the bigger picture.

Though we are not advocating that all entrepreneurs should micromanage their businesses, some amount of involvement with the day to day running is essential and indeed, critical.

This means that the entrepreneur should handhold the business especially in the formative years or the first year at the minimum to ensure that there is no slip between the cup and the lip where the translation of ideas into the running of the business is concerned.

Often, many entrepreneurs consider it beneath themselves to engage and involve in say things such as work schedules, human resources, and day to day financials and end up paying the price for such negligence.

Peaking too Early or Too Late

The fifth reason why many entrepreneurs fail is that their ventures often peak early or peak late leading to missing the curve when the right combination of ideation, incubation, and execution is actualized leading to success.

For instance, some entrepreneurs have great and game-changing ideas but peak too early meaning that they misread the signals from the market.

This often leads to burnout and fatigue especially when the desired momentum has to be generated. On the other hand, some entrepreneurs peak too late meaning that they misjudge the timing when their products or the solutions have to be brought to the market.

In both cases, the imperative is to ensure that the time from ideation to bringing to the market is just about right.

5. Tips for Becoming a Successful Entrepreneur

The many years of experience in Entrepreneurship have taught me many lessons and like to share them.

To become a successful entrepreneur and make your business successful, you need to consider a number of elements such as:

• What is the long-term direction of your company and do you have an effective strategic plan guiding your course and direction?
• What are the key areas which require continuity and development of the people resources within your company?
• Who are the key people you want to develop and nurture for the future?
• How does the concept of change management planning fit into your strategies?
• Are you concentrating your operational and planning efforts in the areas where the returns will be highest?
• What are the paths that your strategies should be following? Is each strategy customized to fit the abilities and talents of the people involved?
• Are you nurturing your customers so as to keep them loyal and not lose them to other, possibly faster-moving companies?
• What strategies should you be considering for your customer delight processes?

SUMMARY:

An entrepreneur is someone who develops a business model, acquires the necessary physical and human capital to start a new venture, and operationalizes it and is responsible for its success or failure. Following are a few of the key characteristics of good entrepreneurs:

• Innovative
• Leadership Qualities
• Believes in Creative Destruction
• Risk Taker

Some of the key reasons for the failure of Entrepreneurs are:

• Problems with Funding
• Staffing Issues
• Cash Crunch and Drying up of Liquidity
• Operational Mismanagement
• Peaking too Early or Too Late

Key Entrepreneurial Skills are:

Personal Skills

• Developing Self-awareness
• Managing Stress
• Problem Solving Skills

Interpersonal Skills

• Efficient Communication
• Influential Skills
• Motivating Others
• Conflict Management Skill

Thank you for reading. I have started much business and helped others do the same and hope that this will give you a guiding light in the right direction and to avoid bumps on the roads.

This has turned into a course. But ould not cover all topics here but if you are interested, contact me and will be happy to send it.

The full course objectives are: