The Importance of Developing Business Skills

Running a small business can be tricky. Owners often get caught up in running the day-to-day business and don’t prioritize time to work on the business as well. This is never a good idea. Spending time looking at how the business is functioning internally and externally is an important task that key decision-makers should routinely do.

Why the concern? Consider the implications of not knowing that inventory costs went up on the last order, a competitor changed their product line to compete with you directly, or accounting transactions are being entered incorrectly into the books. Suppose several things happen in a short period of time, and they go unnoticed by an owner. In that case, bad information or lack of knowledge can seriously hamper their decision-making process.

Wrong assumptions and poor decisions can quickly worsen issues over time. When owners recognize the problems, many will not deal with the warning signs because they don’t know how to fix them. If they wait too long, the business will be at serious risk.

So, where to begin? First, owners need the right skills, tools, and knowledge to recognize problems, make sound decisions, and contemplate growth opportunities. Before going into business, basic business knowledge is helpful, but it is never too late to gain the knowledge and skills needed to run a business smoothly and efficiently.

There are a variety of skill sets that owners can learn to help achieve goals and gain confidence. Soft skills such as critical thinking, leadership, and communication enable you to lead, guide, delegate, communicate, solve problems, make decisions, and manage time. Technical skills such as finance are key to learning more about accounting, economics, statistics, and profitability. Financial literacy includes everything from budgeting to financial planning. Finance is important; knowing how to apply for a loan, understanding what a profit and loss statement is, and knowing your numbers – income, expenses, cash flow, and taxes all should be put into a budget that you use to monitor daily, weekly, monthly, and annually. Putting systems into place that work for you, including invoicing, payments, and auto payments, helps reduce costly mistakes and can free up resources such as time and money, making you more efficient.

What to do? There are many ways to learn the business skills you need. Overwhelming? Maybe, but the expectation should not be that you will learn all these skills quickly. Learning is a process, and your experiences will help you make sense of the more difficult things you have to learn.

• Training/ Classes: Many business organizations, such as the local Chambers of Commerce, offer live business training opportunities in your local community. SBA, SCORE, WBC, and your local SBDC also list training opportunities on their websites. Online classes are a great opportunity, and some can be taken at any time of day.
• College Class: Check with your local university, college, and continuing education groups. Many of these offerings can be audited if you are not working towards a degree or class credits, allowing you to take the course for no credit, homework, or tests.
• Mentors: Reach out and find local mentor opportunities and no-cost advising services such as the ND SBDC. Hiring legal and accounting professionals is worth the price of keeping you out of trouble and is a great way to learn the ropes.

Learning is a lifelong process. Businesses change quickly, as does the environment in which we live. Owners who stay vigilant and have the right mix of knowledge, tools, and support will be better equipped to resolve problems and continue to grow prosperous businesses.