Leadership skills key to successful business
Marc L. Goldberg
SCORE certified mentor
Question: I am thinking about starting a small business. What skills do I need to be successful in launching and growing my own business?
Answer: Many people think that having passion for what they are planning is enough, but it is only a small portion of the requirements to start a small business. Having a broad range of skills in both management and leadership are prerequisites to investing your time and resources in your own enterprise.
These skills include leading and guiding people, communicating at multiple levels, being a multitasker, being a negotiator, a marketer, and selling your value proposition to a targeted audience. Many mentors will tell you that there are two skills that every owner/manager must have when launching a business: selling and managing cash flow. This takes in both ends of the spectrum – getting revenue in the front door, and making sure it is effectively managed once it is received.
Leadership: Managing is organizing and executing. It’s understanding the principles of business – accounting/ finance, sales/marketing, production — and applying them to the work of the business. Leadership is providing direction, implementing plans and motivating people. Author and lecturer Bruna Martinuzzi offers these profiles on the seven primary leadership styles: 1. Autocratic – “do as I say.” This command and control style is rather passé.
2. Authoritative – “follow me.” These are confident leaders who show the way. In times of uncertainty, this style lifts the fog for many employees.
3. Pacesetting – “do as I do.” This is the driven leader who sets the bar high for performance and pushes the pace.
4. Democratic – “what do you think?” They share information and seek opinions.
5. Coaching – “consider this.” Views employees as a reservoir of talent to be developed.
6. Affiliative – “people come first.” This type of leader gets up close and personal with people. They pay attention and support the emotional needs of the team.
7. Laissez-faire – “swims with the
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current.” Lets team members spread their wings, with a lack of direction, and is the opposite of autocratic.
Goal setting: An important question every business owner/manager faces is “where are we going, and how are we going to get there?” This means setting smart goals and objectives. This also means setting goals/objectives at various levels. What are the business goals? What are the individual team goals? What are the personal goals for each member of the organization? Management’s role is not only to establish goals/objectives and communicate them, but also to be accountable for them with KPIs (Key Performance Indicators) to ensure progress is being made. Without goals and objectives the organization is like a rudderless ship – wherever it goes, it goes.
Communication: Managing means communicating with others to ensure they understand your mission, brand, goals and objectives, and values. To be a good communicator you have to be patient. Stephen Covey, author of “The 7 Habits of Highly Effective People,” said it best: “Listen first to understand, not to just reply.” Effective communicators are respectful, know how important body language is and are good listeners.
Sales and marketing: There are two functions that business owners/ managers need to hold close and maintain control over – cash flow and sales generation. Understanding the difference between sales and marketing is first. Marketing defines the customer base and locates them, while sales closes the deals with targeted customers to generate revenue. Not only is it necessary to research the customer base, but understand their needs, wants and desires so the business can position itself so buyers see no suitable substitute for them.
Financial: Knowledge of basic accounting and business finance are musts. Knowing what statements are needed and how to use them in the management of the enterprise are mandatory in any business’s success. Cash management is the most critical. More businesses fail because they run out of cash than for any other reason. Tracking the sources and uses of funds is a fundamental management tool.
Understanding the profitability of the enterprise through the profit-andloss statement comes next. And the balance sheet provides a snapshot in time of the assets, liabilities and equity of the business, offering a glimpse of its overall health. It is not enough to be passionate about the mission of the business. One must understand and apply accounting and finance principles to create a sustainable entity.
Time management: Effective managers can organize, plan, schedule and set priorities for themselves and their teams so that work is accomplished in a timely and efficient manner. That means understanding the difference between what’s urgent and what’s important, and being able to prioritize work accordingly. Concentration where it counts is an approach to time management that promotes working on what will generate the highest return for the resources invested. That means constantly referring to the “to do” list, so that which is urgent is being worked on first, and tasks with lesser importance are worked on as time and resources are available.
Team building: Only solopreneurs don’t need to be team builders. (However, they need to create teams of their strategic partners and suppliers.) Team building is the process of turning a group of individual contributing employees into a cohesive team, a group of people organized to work together to meet the needs of their customers by accomplishing their purpose and goals.
If you have employees, the ability to organize and lead people is mandatory. Having highly performing teams is what generates great customer service and high revenue. Setting a clear direction through honest and open communications and a melting pot of ideas is critical to team building and creating common goals. This entails supporting change and risk-taking, and requires defined roles with mutual accountability.
Contributed by Marc L. Goldberg, certified mentor. Sources: Business-Phrases.net, “Business Management Skills,” Matin Valchev, PMP; Buruna Martinuzzi. For free and confidential mentoring contact SCORE Cape Cod & the Islands at www.capecod.score.org, firstname.lastname@example.org, 508-7754884. Download the free e-book “Tips from SCORE, Vol. II,” from Amazon: http://amazon.com/dp/B08QPR7G35