Entrepreneurial Skills

The Skills You Need to Build a Great Business

What skills do you need as an entrepreneur?

© iStockphoto/leventince

What makes someone a successful entrepreneur? It certainly helps to have strong technology skills or expertise in a key area, but these are not defining characteristics of entrepreneurship.

Instead, the key qualities are traits such as creativity, the ability to keep going in the face of hardship, and the social skills needed to build great teams.

If you want to start a business, it's essential to learn the specific skills that underpin these qualities. It's also important to develop entrepreneurial skills if you're in a job role where you're expected to develop a business, or "take things forward" more generally.

In this article, we'll look at the skills you need to be a successful entrepreneur, and we'll explore resources that you can use to develop the traits needed for success.

Defining Entrepreneurship

Some experts think of entrepreneurs as people who are willing to take risks that other people are not. Others define them as people who start and build successful businesses.

Thinking about the first of these definitions, entrepreneurship doesn't necessarily involve starting your own business. Many people who don't work for themselves are recognized as entrepreneurs within their organizations.

Regardless of how you define an "entrepreneur," one thing is certain: becoming a successful entrepreneur isn't easy.

So, how does one person successfully take advantage of an opportunity, while another, equally knowledgeable person does not? Do entrepreneurs have a different genetic makeup? Or do they operate from a different vantage point, that somehow directs their decisions for them?

Though many researchers have studied the subject, there are no definitive answers. What we do know is that successful entrepreneurs seem to have certain traits in common.

We've gathered these traits into four categories:

  • Personal characteristics.
  • Interpersonal skills.
  • Critical and creative thinking skills.
  • Practical skills.

We'll now examine each category in more detail, and look at some of the questions you will need to ask yourself if you want to become a successful entrepreneur.

Personal Characteristics

First, examine your personal characteristics, values, and beliefs. Do you have the mindset that's typical of successful entrepreneurs?

  • Optimism: Are you an optimistic thinker?   Optimism is truly an asset, and it will help get you through the tough times that many entrepreneurs experience as they find a business model that works for them.
  • Vision: Can you easily see where things can be improved? Can you quickly grasp the "big picture," and explain this to others? And can you create a compelling vision of the future, and then inspire other people   to engage with that vision?
  • Initiative: Do you have initiative  , and instinctively start problem-solving or business improvement projects?
  • Desire for Control: Do you enjoy being in charge and making decisions? Are you motivated to lead   others?
  • Drive and Persistence: Are you self-motivated   and energetic? And are you prepared to work hard, for a very long time, to realize your goals?
  • Risk Tolerance: Are you able to take risks, and make decisions   when facts are uncertain?
  • Resilience: Are you resilient  , so that you can pick yourself up when things don't go as planned? And do you learn and grow from your mistakes and failures? (If you avoid taking action because you're afraid of failing, our article on Overcoming Fear of Failure   can help you face your fears and move forward.)

Interpersonal Skills

As a successful entrepreneur, you'll have to work closely with people – this is where it is critical to be able to build great relationships   with your team, customers, suppliers, shareholders, investors, and more.

Some people are more gifted in this area than others, but, fortunately, you can learn and improve these skills. The types of interpersonal skills you'll need include:

  • Leadership and Motivation: Can you lead   and motivate others   to follow you and deliver your vision? And are you able to delegate   work to others? As a successful entrepreneur, you'll have to depend on others to get beyond a very early stage in your business – there's just too much to do all on your own!
  • Communication Skills: Are you competent with all types of communication  ? You need to be able to communicate well to sell your vision of the future to investors, potential clients, team members, and more.
  • Listening: Do you hear what others are telling you? Your ability to listen can make or break you as an entrepreneur. Make sure that you're skilled at active listening   and empathetic listening  .
  • Personal Relations: Are you emotionally intelligent  ? The higher your EI, the easier it will be for you to work with others. The good news is that you can improve your emotional intelligence!
  • Negotiation: Are you a good negotiator  ? Not only do you need to negotiate keen prices, you also need to be able to resolve differences between people in a positive, mutually beneficial way.
  • Ethics: Do you deal with people based on respect, integrity  , fairness, and truthfulness? Can you lead ethically  ? You'll find it hard to build a happy, committed team if you deal with people – staff, customers or suppliers – in a shabby way.

Tip:

You can improve your people skills further by taking our How Good Are Your People Skills?   self-test.

Critical and Creative Thinking Skills

As an entrepreneur, you also need to come up with fresh ideas, and make good decisions about opportunities and potential projects.

Many people think that you're either born creative or you're not. However, creativity is a skill that you can develop if you invest the time and effort.

  • Creative Thinking: Are you able to see situations from a variety of perspectives and come up with original ideas? (There are many creativity tools   that will help you do this.)
  • Problem Solving: How good are you at coming up with sound solutions to the problems you're facing? Tools such as Cause & Effect Analysis  , the 5 Whys   Technique, and CATWOE   are just some of the problem-solving tools that you'll need to be familiar with.
  • Recognizing Opportunities: Do you recognize opportunities   when they present themselves? Can you spot a trend  ? And are you able to create a plan to take advantage of the opportunities you identify?

Practical Skills

You also need the practical skills and knowledge needed to produce goods or services effectively, and run a company.

  • Goal Setting: Do you regularly set goals  , create a plan to achieve them, and then carry out that plan?
  • Planning and Organizing: Do you have the talents, skills, and abilities necessary to achieve your goals? Can you coordinate people to achieve these efficiently and effectively? (Here, effective project management skills   are important, as are basic organization skills  .) And do you know how to develop a coherent, well thought-through business plan  , including developing and learning from appropriate financial forecasts  ?
  • Decision Making: How good are you at making decisions?   Do you make them based on relevant information and by weighing the potential consequences? And are you confident in the decisions that you make?
  • Core decision-making tools include Decision Tree Analysis  , Grid
    Analysis
     , and Six Thinking Hats  .
  • You need knowledge in several areas when starting or running a business. For instance:
    • Business knowledge: Do you have a good general knowledge of the main functional areas of a business (sales, marketing, finance, and operations), and are you able to operate or manage others in these areas with a reasonable degree of competence?
    • Entrepreneurial knowledge: Do you understand how entrepreneurs raise capital? And do you understand the sheer amount of experimentation and hard work that may be needed to find a business model that works for you?
    • Opportunity-specific knowledge: Do you understand the market you're attempting to enter, and do you know what you need to do to bring your product or service to market?
    • Venture-specific knowledge: Do you know what you need to do to make this type of business successful? And do you understand the specifics of the business that you want to start? (This is where it's often useful to work for a short time in a similar business.)

You can also learn from others who have worked on projects similar to the ones that you're contemplating, or find a mentor   – someone else who's been there before and is willing to coach you.

Tip 1:

As an entrepreneur, you also need to be able to navigate the rules and regulations that apply in the country you're working in. These websites will give you a good start with this:

Tip 2:

If you choose to learn more about a particular venture by working for another organization, be aware of non-compete clauses in your employment contract. In some jurisdictions, these clauses can be very restrictive. You don't want to risk your future projects by violating the rights of another entrepreneur or organization.

Is Running a Business for You?

Armed with this information, assess your skills in each of these areas. The harder you work to build your skills, the more successful you're likely to be.

Having said that, many successful business-owners are impulsive, uncomfortable with risk, or belligerent with colleagues and customers. Still others have little business knowledge, and have simply hired the talent they need to succeed.

You can succeed without some of these skills, however, the more you're missing, the more likely you are to fail.

As you work through your analysis, you may feel that you're ready to take the plunge into your own venture. Alternatively, you may decide to wait and further develop your skills. You may even decide that entrepreneurship isn't for you.

Whatever your choice, make sure that it feels right. Running a business isn't for everyone.

Key Points

While there is no one "right" set of characteristics for being a successful entrepreneur, certain general traits and practical skills will help you succeed.

By examining your own personal strengths and weaknesses and comparing these with those of the typical entrepreneur, you can get a sense of how well this career will fit with your personality.

Remember, becoming an entrepreneur is a career decision like any other. Do your homework, look at your needs and desires, and then decide whether this path is for you.

This site teaches you the skills you need for a happy and successful career; and this is just one of many tools and resources that you'll find here at Mind Tools. Click here for more, subscribe to our free newsletter, or become a member for just $1.

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Comments (9)
  • MichaelP wrote Over a month ago
    This article paints the landscape and working regularly with many Entrepreneurs what always amazes me is how each individual will find a unique way to express their entrepreneurial spirit.

    I often hear: If only i had more ....money/time/resources/experience and although it can help, surprisingly it can also be a handicap.

    Just remember Impossible always has, and always will end in 'possible'

    Entrepreneurship isn't easy but it is fun and friendly if any one needs some feedback please get in touch and good luck to all entrepreneurs around the world. Work smarter, not just harder!

    cheers Michael
  • James wrote Over a month ago
    Hi Everyone

    We’ve given this popular article a review, and the updated version is now at
    http://www.mindtools.com/community/pages/article/newCDV_76.php

    Discuss the article by replying to this post!

    Thanks

    James
  • Yolande wrote Over a month ago
    Hi all

    Aus7e - interesting perspective that you've given here and food for thought...

    Personally I have found my critical and creative thinking skills to be of the utmost importance since you have to be a step ahead of your competition and you also need to be a step ahead of your clients - you need to offer them something that they don't yet know they need (if that makes sense to anybody but a blonde ).

    Regards
    Yolandé
  • aus7e wrote Over a month ago
    Hi All,

    While am in line with the thought shared so far about entrepreneurship, however succeeding does not really demands '' very hard work '' rather I would say is more of ''smart work'', ''taking responsibility'' and ''positive passion'' to succeed no matter what.

    Above all, the major critical success factor in addition to other factors discussed is the ''God factor''. Some people called it ''infinite intelligence'' or ''Luck''.

    Whatever name it called, today we hear about spiritual intelligence as contributing factor to start and building a sustainable business. Where do the ideas come from? and it takes people who have develop their infinite intelligence to uncover sound ideas.

    Succeeding as an entrepreneur has gone beyond business schools strategies and even experience to involving a certain level of spiritual intelligence otherwise large conglomerates will not be closing shop in spite of having people with all this factors earlier discussed.

    My thought.

    aus7e.
  • Dianna wrote Over a month ago
    Thanks felicen, I'll forward your message so we can get to the bottom of the glitch. Let me know if it continues.

    Dianna
  • felicen wrote Over a month ago
    Hi :

    Just a quick clarification, when I tried to use the printer friendly version, it converts other article. Tried several ways but to no avail. This also happens to other articles I tried to print. Maybe you can look into that.

    Thank you.
  • JosieB wrote Over a month ago
    I tend to think there is predisposition for entrepreneurship (and leadership too for that matter lulu!). You can develop your natural aptitude. Those who have the internal characteristics even if they are lying dormant can flourish given the right amount of effort and circumstance. For others it is an uphill battle that depends much more of cicumstances and is hard to maintian under anything but optimum conditions. This category also includes the people who start a business, keep it small, and treat it like a job. True entrepreneurs are the ones who keep starting busiensses, building them, then selling them off in order to move on to another start-up. It's the fever to create and solve problems that drives these people not necessarily the steady, day-to-day practice of running a business.

    I've known people of both types and they seem to recognize this difference in themselves as well.
  • lulu wrote Over a month ago
    As an interesting twist - I studied social entrepreneurship as part of a Post Grad Diploma in Not-For-Profit Management. There are similarities between the two, but there are also great divides - the driver for social entrepreneurship being more of social change and accountability rather than bottom line.

    There is always the great debate on whether entrepreneurs are made or are they born entrepreneurs and it totally depends on what you read as to what findings you will discover. There are similar debates globally around leadership - are leaders born or made, but that is another topic altogether.

    Lulu
  • MichaelP wrote Over a month ago
    Great overview on relevant questions. I believe great ideas will carry mediocre entrepreneurs but its difficult for great entrepreneurs to carry mediocre ideas!

    I have tried entrepreneurship, and both failed and succeeded! I prefer success!! The questions I ask over and over again, beyond - is this a great idea, are:

    Is this a real solution to a real issue that people are or will in the future be prepred to spend money to solve?.
    Does the solution proposed cost less than amount of money people are willing to spend?
    What unique characteristic of this solution make it compelling/exciting?

    As an example 'Mind tools' is both a great idea and meets the other criteria.

    cheers

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