4 Reasons Entrepreneurs Need Management Skills

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As we all know, most small businesses fail within 5 years. Let’s examine this phenomena to help build some confidence as we move forward. Business research has revealed that many small businesses fail because of situations occurring in the business itself, not outside forces. Who controls the activities inside the business? The owner and the affiliates. A further analysis shows that the perspective of the owners, as he/she controls the operation, is hindering business development. The owners’ focus is on the technical skills they brings to the enterprise. For example, the owner may be an expert accountant, baker, computer scientist, plumber, or carpenter experiencing great success in that skill. However, as the demands of the business increase, various functions are not attended to such as planning and projecting resources for serving more customers. This also includes the negligence of critically important administrative functions. When this much is left undone, the business fails. Critical functions must be managed and performed for fortifying and sustaining a business which makes basic Management Skills extremely important for entrepreneurs.

According to a report by Zuzana Papulová and Matej Mokroš of Comenius University, Slovakia:“Basic knowledge in management is needed at initial stage of running an enterprise and also later during the development stage. At the beginning, the management of the enterprise is carried out by the sole founder/owner, who must perform all the actions needed with doing the business. Crises occur when the enterprise is successfully expanding and the entrepreneur (usually still the founder and owner) is not capable of running it.”

As Michael Gerber in the E-Myth wrote:”If you are unwilling to change, your business will never be capable of giving you what you want.”

Therefore the first reason you need Management skills is:

1. You need a managers perspective for success.

You probably really enjoy the hands on effort required to contribute the product or service that you provide. After all, that’s why you started the business anyway. If you continue to work with your head down(on your service, product, or day to day details) and never take time to look at and construct the big picture, it can be fatal to your enterprise. “Big picture thinking” is probably your greatest responsibility and you’ll need to find regular time for it. It’s a different perspective because you will not only work in the business, you will also work on sustaining, fortifying and growing your business.

As the business owner, you will take time out of your busy schedule to be the “Captain of the Ship” and the captain must have a map to help maintain the course or the ship will end up anywhere or no where. The only way you can have a map is to take time to draw one up. This requires regular times of contemplation. Determine your best thinking time and put it in your schedule. This will help you have essential documentation including a strategic plan ( collaborated if needed). Remain open minded with a learning attitude and pay attention to your emotions. What could they be telling you? Daniel Goldman, in his book, “Emotional Intelligence”, has pointed to the importance of emotions; concluding that the Emotional Quotient is more important than the Intelligence Quotient. He believes that “our deepest feelings, our passions and longings, are essential guides, and that our species owes much of it’s existence to their power in human affairs”. Read the book for an interesting insight. Finally, practice patience to immerse your enterprise in the great Vision that you have for the future and persevere in the face of the many obstacles that you will inevitably face.

“The gift of fantasy has meant more to me than my talent for absorbing positive knowledge.” Albert Einstein

“Big thinking picture” is a valuable tool for your growing business because it can help lead you to the personal and business success you desire. You will use it for designing a winning strategy. This is one of those exercises that will bring you to the realization of your dream.

2. The skill to develop and manage systems is required.

Small businesses that succeed develop systems of operation for almost every function performed. Business systems are activities performed in a consistent manner to achieve the organization’s goals. They are performed in several steps and the successful manager documents these steps for easy replication. To most, this will be boring and tedious but once the documents are completed, this will give you time to do what you enjoy doing and enable you to sustain and enlarge the enterprise. This is one of the great secrets of successful business that many small business owners avoid. Creating systems simply starts with documenting what you do and how you do it. They may be simple lists. It could be called an operations manual or a systems manual or some unique name that might come to you; but the object is to document the successful operations that you want to make routine.

3. The ability to manage strategically is critical.

Here, you’re required to always hold a mental model of how your operations work together. This model, when documented, will be a framework for your strategic management plan. There’s a lot of discussion about the value of strategic plans. Some say they aren’t needed, others say that they inhibit growth and iteration and some say they don’t work. Any way you look at it, some type of planning is essential. You must be able to see and project how you’re going to get to your Vision and this plan should be available and clear to all who share the responsibility to get there. This plan will guide your business through it’s various stages of development. You’ll be able to design the operations and standards that will guide your business to targets you have set for growth and scaling. Strategic Management will answer the questions: Where are we now in relation to our Vision? What are our eventual targets? How will we get to these targets? Strategic management is one of those exercises that will make your dream a reality.

4. The ability to hire the right talent is essential.

The Gallup organization conducted a large study of managers in approximately 400 companies. Marcus Buckingham and Curt Coffman described how the study pointed to the need to select employees by testing for talent. They further concluded that”…every role, performed at excellence, requires talent.” They found that the managers defined talent as” a recurring pattern of thought, feeling, or behavior that can be productively applied”. In other words, these are the behaviors that people do often, such as, the ability to remember names, not just faces or the ability to make friends easily. Buckingham and Coffman concluded that every role performed excellently required talent. This talent is our unique way of thinking, feeling and behaving. We all have filters that tells us what we should think, feel or do.

You can look for new employees that share and demonstrate your core business values. These are elements of his or her talent, “the recurring patterns, thought, feeling and behavior.” If you can hire people with the natural talent you need in your business; it will, more than likely, lead to long term success. So this is an area worth studying. It worked for 400 successful managers, so it should work for you. Look for habits. Habits are talents; they are enduring characteristics and prominent attitudes that are revealed in conversations. Choose people with beliefs, values and habits that fit your business beliefs, values and habits.

Fundamentally…

If you want to build a sustainable or even a legacy business, management skills are essential. The primary requirement is to acquire a manager’s perspective. You will not only work as the technical expert, you will also work as the CEO with a global perspective of your business. You will see the importance of making regular time for “big picture thinking”. You will be able to understand the importance of designing systems of operation for each business function; and you will apply strategic management to these systems to achieve your business vision. Finally, you will understand the importance of only adding workers to your business who fit the business culture and goals. There are other management skills needed, but the ones described are fundamental to good management practice.

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6 Small business Practices for Sustainability

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Many new business owners are starting a business not only because they love their skill but because they want to build a sustainable even a legacy business. They want their contribution to the business world to last for many years. Actually, the impact you have on society as you serve it with your business, is creating a legacy whether you know it or not. In this post, we will look at what you can do if you consciously intend to build a sustainable business. According to Kimberly Wade-Benzoni in “How to Think About Building your Legacy”, “Legacy building in business contexts can take the form of working to ensure the long-term viability of the organization and leaving it stronger, more productive, and more valuable than it was before.” In other words, it requires you to think about the long term implications of the business actions you take. Legacy thinking can help you create a big business because of your long term perspective. This post will explore 6 practices that you can adopt as you build your business from startup to sustainability or/and legacy.

“To be a successful entrepreneur one needs a vision of greatness for one’s work. If we dream extravagantly we will be inspired to forge a reality beyond the straight jacket of practicalities.”
Ernest Hall

1. Design a Mission or purpose that’s meaningful to you. Your purpose should be long lasting or intended to remain unchanged indefinitely. This requires a very broad purpose that does not contain specifics. Some examples would be:

Alzheimer’s Association: “Our Vision is a world without Alzheimer’s disease.”

Norfolk Southern: “Be the safest, most customer-focused and successful transportation company in the world.”

Amazon: “Our vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.

Disney: To make people happy.

Instagram: Capture and Share the World’s Moments.

How are these Purposes similar?
-They are very general. They do not specify any particular procedure or, in most cases, service or product.
-They can stay relevant forever. There is no time limit or time span.
-Technological advances will not change the basic purpose.
-They are inspiring and motivating.

2. Consistently apply state-of-art Management skills. Excellent management of all facets of your business is required for the building, fortifying and scaling of your business. These are specific skills that will save you time, money and a variety of mistakes. They will also efficiently and effectively lead you to excellence. One of the basic management skills you will need is:

Strategic Management Skills
There’s a lot of discussion about the value of strategic plans. Some say they aren’t needed, others say they inhibit growth and iteration and some say they don’t work. Any way you look at it, some type of planning is essential. You must be able to see and project how you’re going to get to your Vision and this plan should be available, explicit and clear to all who share the responsibility to get there.

You will develop a Strategic Management Plan. That is, a plan to guide your business through it’s stages of development. What does a strategic management plan contain? A Strategic Management Plan will include your Vision for your enterprise for the next 3 to 5 years. It will also contain your objectives systems of operation and standards. What discipline does it take to create one? You must become the “Keeper of the Vision.”

3. Become a committed Visionary. The Visionary holds the key purpose in his/her mind and maintains a culture for the creation of a sustained enterprise.

Visionary Requirements:
Develop a habit of Big Thinking by setting aside time to think. This is a common sense directive, but the reality is that life is fast paced and there are many distractions, responsibilities, and surprises hitting us everyday. So it’ll take a very deliberate effort to make time to think. It must be done if success is your goal.
Think big about all of your business projects. Look at things from a wide and far reaching perspective. For example, think of your contribution to the world, or stretch your imagination so that you can see everything that is possible from where you are.
Make regular use of your imagination. Don’t put limits on what your business can achieve. This type of imagining can be highly motivating.

4. Encourage a shared purpose throughout your organization. Employ others who value and demonstrate your core purpose in their life and work habits.

“Don’t listen to their words, fix your attention on their deeds.” Albert Einstein

The Gallup organization conducted a study of managers in approximately 400 companies. Marcus Buckingham and Curt Coffman described how the study pointed to the need to select employees by testing their talent (habitual behaviors and strongly held principles). You can look for new employees that share and demonstrate your core purpose. These will be elements of his or her talent, “the recurring patterns, thought, feeling and behavior.” If you can hire people with the natural talent you need in your business; it will, more than likely, lead to long term success. So this is an area worth studying. It worked for 400 successful managers, so it should work for you. Look for habits. Habits are talents; they are enduring characteristics and prominent attitudes that are revealed in the conversations you have with potential affiliates.

“You can’t just keep doing what works one time, because everything around you is always changing. To succeed, you have to stay in front of the change.” Sam Walton

5. Practice “proactive innovation”. Keep continuos research in your field and habitually anticipate needed improvements, simplifications or redesigns. Design a research System for every operation in your enterprise. You can plan to hire people in the future who will carry out these functions. The point is to try to stay ahead of changes or create the changes yourself.
Fusion92 vice president of innovation Jacob Beckley believes “ innovation might have slightly different meanings depending on the industry, its core is universal. embodies the improvement of something that has come before,” Beckley also said, “It is the evolution of convenience, efficiency and effectiveness.” He believes companies that regularly innovate will be the ones enjoying on-going success.

See: “Innovation: Key to Successful Business” by Chad Brooks
According to Beckley:
“In the vast sea of innovation, companies that take the largest risk, close the biggest gaps and identify the newest opportunities are rewarded with the title of true innovators and leaders by their consumers and peers,” he said. “These true innovators are setting themselves apart from any and all competition.” – See more at:

6. Practice a focused patience. Obviously, this type of legacy building is complex and demanding. It will take a great amount of time and energy. As you begin to realize what’s ahead, you will condition yourself for the focus and patience needed to get to your targets and ultimate goals. The fuel for focused patience will be continuos learning.
“Some experts go so far as to say learning is leadership, a leader’s constant quest for the improvement of the business, people, and results. As a leader, what do you need to learn? What leadership skills, strategic practices, or management techniques will help you be more effective? Look at your results, and notice where there’s room for improvement. What do you need to learn in order to improve those results? This is the kind of learning that supports powerful leadership.” Joelle K Jay Ph.D

Our Age of Information requires continuous learning, but this is often difficult for the entrepreneur. Particularly, if you are the one responsible for everything that happens in your business; but, somehow, if you commit to legacy building, you will find a way to do it. In fact, today’s technology makes it much easier, than in the past, to do the ongoing research you need.

“Once you stop learning, you start dying.” Albert Einstein

Fundamentally…
If you intend to keep your organization alive for many years, there are basic things that you must do. You must find a purpose that you love and keep it at the forefront of your mind at all times. Think of yourself as the “Vision keeper” because you, alone, are responsible for it’s life. Live your purpose and demonstrate it in all your work related activities. Finally, be prepared to proactively innovate in your enterprise. This will keep you and your affiliates motivated and keep your enterprise relevant for years to come.

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