Personal resources are the set of skills, knowledge, abilities and mindset we develop through education, training and experience. Let’s review the most important personal resources that are associated with successful entrepreneurship.
Technical Skill
Technical skill is gained from engineering or scientific fields, or any task with a specific skill required. These may include understanding programming languages, replacing spark plugs or testing soil for contaminants. We all have technical skills. You may have perfected your automotive or fabrication skills in high school. You may have taken formal training to develop technical skills in a trade, art, business or scientific field. Having a technical skill can be a natural starting point for would-be small business owners — the “If I can build it, they will buy it” frame of mind. Caution: Road block ahead. Technical skills alone are not sufficient for starting or growing a small business. Yes, the school of hard knocks opens its doors for about 130,000 new business owners in Canada every year. Sadly, only 30,000 of these would-be Richard Bransons are still around five years later. Simply put, technical skills are only one part of the success equation. You also need business skills to improve your odds.
Business Skill
Business skill is gained from business-related tasks. Remember that lemonade stand you ran at the end of your driveway when you were five years old? You were learning about the functional areas of business — product innovation and development, marketing and sales, cash flow management, inventory management, human resources, competition, manufacturing and corporate strategy. Bet you wish you’d paid more attention back then, right? The five business skills needed to improve your odds of success in small business are the following:
- Managing Money: handling cash flows, financing, credit, taxes and budgeting
- Managing Markets: understanding customer needs, knowing your customers’ likes and dislikes, communicating with your customers, setting prices, quoting and delivering on your promises
- Managing People: hiring, training, compensating, leading and motivating people
- Managing Operations: buying supplies, equipment, manufacturing, quality control, and facilities management
- Managing Compliance: paying taxes, getting licenses and permits, insurance, and managing product liability
Education
Ask most successful entrepreneurs today about their educational background and most will tell you they finished high school and went on to complete advanced technical training or general post-secondary education. Research shows that small business owners in general have higher levels of education than employed workers. It also supports the connection between education and success in business, where education is seen as bettering one’s position in life. The education you’ve received has likely increased your confidence and self-esteem in many areas and supplied more information about the world around you. This improves your ability to perceive business opportunities. In fact, the effect of education on entrepreneurial success is stronger and more positive than any other personal resource. The slam-dunk personal preparation for small business success is education — certificate programs in business, bachelor degrees in business, commerce or management and small business training courses, like GoForth Institute!
Experience
“Get a job!” No really. Get a job. And get a job in the industry in which you think you might like to start a business. There are three types of experience associated with successful entrepreneurship: i) technical; ii) managerial; and iii) entrepreneurial. If you are working for a company in which your technical skills are being developed, ask to gain exposure to other areas of the company. Volunteer to “shadow” the accountant, or the marketing person, or the IT person, or the receptionist. Get exposure to key areas of the business you are unfamiliar with. Alternatively, volunteer to take a position on your condo board, kid’s soccer team or other club or association. Another way to gain experience in business management is to run your small business called “the home.” Take on bill payment, family communication, scheduling and inventory (of groceries and toilet paper!)
Tolerance of Uncertainty
Think about the difference between working for someone else and starting your own business. Working for someone else is more of a sure thing. You have a set number of hours to work and you’ll have the certainty of receiving a paycheque. Contrast that with starting your own business. You have to give up a regular paycheque, you’ll be using your own money to start the business, you may not have an income for several months and the business may not succeed — in which case you’ll lose the money you invested. As if that wasn’t enough, your business lacks structure, organization and a sense of order. In short, you live in chaos. To become a successful entrepreneur, learn to live with uncertainty and ambiguity. Become a master at managing the unknown and crafting strategy to survive difficult times. It’s more than just a personal resource — learning to thrive in unpredictable and uncertain business conditions is often the source of good ideas, inventions or innovations.
Adaptability
Adaptability is the ability to change to fit new circumstances. The only thing certain about life is change. The same can be said about small business. You need to think about more than ordering supplies for your book store or training your bike couriers. Successful business owners keep track of what’s happening in the business environment around them — what their customers are thinking, what their competitors are doing, what their suppliers are up to, how technology is changing and what’s happening in the economy. They are not afraid to make appropriate adjustments in their business to take advantage of changing circumstances in the business environment.
Drive and Determination
Successful entrepreneurs have a natural ability to keep going when the going gets tough, and are motivated to excel at what they do. The odds of business success are stacked against new small businesses, but it’s an entrepreneur’s drive and determination to succeed that are the tipping point in their favour. As a new entrepreneur, you will be faced with many obstacles and naysayers, many of which may be out of your control. Think about other times in your life when you were faced with adversity. How did you keep going? Why did you keep going? Finding your drive and determination will get you motivated to succeed in business.
Energy
Starting and growing a successful business takes lots of hard physical and emotional work to get the job done. This takes energy — a not-so-learnable psychological trait. Some people can work 16 hours a day and get up refreshed the next day ready to do it all over again. Others can’t. Prepare for entrepreneurship as if you’re training to run a marathon. Take stock of your emotional, physical and spiritual stability — are you in good health? Are you emotionally stable? Do you have a faith community or other network of community support to help you cope with challenging times that lay ahead? If your answer was no to any of these questions, now is the time to work on your issues, not when you are in the middle of starting or growing your venture. Get started with the right mindset to keep you going.
