While I often get asked what it really takes to be successful as an entrepreneur, my answer is usually quite simple. You’d be hard-pressed to find anyone who has achieved such status without the five all-important skills mentioned below.
According to the Oxford Dictionary, an entrepreneur is "a person who makes money by starting or running businesses, especially when this involves taking financial risks". The skills reflected in that definition are therefore the very backbone of any entrepreneurial success.
Having a great business idea is just the start; here are the key skills you’ll need to truly succeed in your venture.
A risk-taker is someone willing to do things that involve danger or risk in order to achieve a goal. What is that goal? What are the dangers involved? How can those risks be mitigated or, better still, eliminated? Do the potential benefits outweigh these risks?
Anyone can take risk. However, "knowledge is power" noted Sir Francis Bacon in 1597. Hence the real skill in risk-taking is understanding what the risks are and weighing them against the opportunities before diving in. And as Warren Buffett once said, "Risk comes from not knowing what you’re doing."
Fostering a financial mindset
Investing is the act of allocating resources, usually money, with the expectation of generating an income or profit. By definition, this makes entrepreneurs a type of investor. Investing demands a rational, numbers-based approach – there is no room for emotion or sentimentality. The same goes in business. Do the numbers stack up? Does a decision make strategic and financial sense? It takes skill to separate ego from strategy.
Life experience matters
Never underestimate the value of life experience. The average age of US entrepreneurs was 45 years in 2018, according to Harvard Business Review. In Australia, a third of start-ups are led by so-called "seniorpreneurs" with an average age of 57.
That’s a lot of experience – of business, of relationships and of life – on which to build a business. Best of all, your experience is uniquely yours. The skill here is not so much in having lived experience, but rather knowing how to harness its power.
Project management is power
With an aptitude for taking calculated risks, thinking by numbers and tapping into past experience, a separate skill set is needed to bring these – and all the other elements of running a business – together. It’s also known as project management.
In the broadest sense, project managers are responsible for planning, organising, resourcing and directing the completion of specific projects for an organisation. And all the while ensuring that said projects are delivered on time, on budget and within scope.
Preparing for the unexpected
Despite an entrepreneur’s best efforts, an enterprise’s ultimate success or failure may well be in the hands of someone known auspiciously as Lady Luck. She was first mentioned by the Greeks – some of the earliest traces of the Goddess Tyche, whose name translates to ‘luck’, ‘chance’ or ‘fortune’, date back to the 5th century BC. Later, the Romans called her Fortuna.
In business, Lady Luck still rules supreme today. Take the COVID-19 pandemic: no-one saw it coming. Some companies have suffered while others have prospered.
By way of a local example, Flight Centre shares had plunged from A$39 in January 2020 to A$14.97 by May 2021. Meanwhile, "Never happened in my lifetime," said billionaire Gerry Harvey last year as Harvey Norman posted a 185.8 per cent rise in profit on the back of pandemic spending.
Obviously, luck itself is not a skill. But as Machiavelli once wrote, Fortuna only controls half the fate of a human being; the other half is a person’s own actions. The only certainty about luck – good or bad – is that it can and does strike. The skill is in being prepared for its eventual arrival in order to minimise the damage from unlucky disasters and take full advantage of lucky opportunities.
Alan Manly is the CEO of Universal Business School Sydney and author of The Unlikely Entrepreneur.