Many small businesses start from a person being a technical expert or genius practitioner, but they also need to know how to run a business. The good news is that running a business is a skill – and skills can be learned. All you need is some dedication and time.
Take the step from practitioner to business owner.
Plumbers, electricians and builders go to trade school and undertake both practical and theoretical lessons as part of their training. Software developers, chefs, lawyers, hairdressers and doctors – they all learn the skills to do their job both capably and competently.
They then finish their education or apprenticeship and get their first job and discover they know less than they thought. So, they continue learning. After a few years, they’re an expert. However, throughout this period they are only learning to become an effective practitioner and not a successful business owner
Running a business is a separate job and a skill too, and therefore it requires time and investment to learn and develop these skills to become capable and competent to do that job well. Unfortunately, business skills are not part of a plumbing, hairdressing or electrical apprenticeship, or part of the curriculum for lawyers, doctors or accountants (yes, that’s not a typo, contrary to popular belief, accounting courses do not equip you with the skills to run a business).
What can you do?
If you don’t have business skills, then you will be unable to successfully be in a director role. So, you either need to acquire those skills by training yourself – actually learning how to run a business – or you need to employ someone with those skills within your business. Gain the skills to Run Your Business Better. Here are three skills you can learn that will help you succeed in business.
Know your numbers
Most people in business are great at what they do but when you talk to them about financial figures they run for the hills. There are some basic numbers and ratios every business owner just needs to know – and luckily, they are easy and quick. While you may have an accountant, you can never forget as a business owner that responsibility for the financial health of your company rests ultimately with you, and you alone, and knowing the numbers is critical.
The numbers, ratios and margins are important because they tell us whether your business is making an adequate return and utilising its resources efficiently. An ‘adequate’ return is subjective – what is adequate to one person, one investor, one owner, one banker, or one industry may be different to what others consider adequate.
There are three groups of financial numbers that you should know – profitability numbers, activity numbers, and liquidity numbers. And for the non-accountant here’s the great news – there are in total only ten key numbers that you need know and understand. Easy to learn, easy to do and easy to remember.
Take the step from practitioner to business owner.
Make a plan and use it
Plans help you stay organised and help you co-ordinate your efforts. Developing plans is not easy. For most small-business owners, their preference is to look at the detail and not the big picture and they prefer to undertake the role of a practitioner rather than an owner in the business.
One of the main reasons that business owners don’t develop and follow a plan is because they are afraid of failure. ‘What would happen if I have a big, hairy, audacious goal and didn’t reach it? What would people think?
When working with business owners, I assure them that the goals of their business are their goals, and no one else cares if they achieve their goals or not. Have you ever had a customer or client ask you what your goals are? I suspect the answer is ‘No’ and I don’t expect you ever will – they just don’t care about your goals.
Not setting a goal or plan is like turning up at the airport without a ticket and not knowing your destination. Think about a trip – ‘What will you do?’ and ‘How will you do it?’ and ‘With whom’ and ‘What do you want out of the trip?’ People spend more time planning their holidays than they spend on planning for their business.
You are more likely to get close to your goal if they first set one. Remember when you were saving up for a car or a house deposit? I bet you had regular savings goals and stuck to a budget. By knowing how much you needed to put away each week or each month, you were more likely to achieve your goal than if you had no goal or plan at all.
Know what skills you don’t have and when to ask for help
People hate asking for help yet people like being asked to help. Running a small business can be lonely at times, where you don’t know who to turn to, and you don’t have the support that you may have in a bigger business. Asking for help broadens you network – be it peers, competitors or someone as a mentor (or a business coach!). Not only are others a good reference points, the interaction can also re-energise you. But don’t just ask anyone, rather think of who can be beneficial to your business, who you can learn from, and who has walked in a small business owner’s shoes.