This question came up the other day, and I had a very different idea than the person who raised it…
I was participating in a forum for entrepreneurs, and someone asked what the fundamental skills are that you need to develop to be successful at entrepreneurship.
He came at it from a bootstrap mentality, and so his suggestions were a laundry list of skills that included things like Photoshop, website development, and so on.
And while I don’t necessarily disagree with those as useful skills for a boostrapping entrepreneur…
My view on what the CRITICAL skills are for entrepreneurs is VERY different.
And I got a TON of positive feedback on this list, so I thought it something that I should share with you as well.
In fact, I’m going to go deep on each item, and give you even more depth and dimension and perspective for why it’s so critical.
First…
80/20-cubed thinking, and how it informs this list…
I count Perry Marshall as a professional friend, and I’ve been a student of Perry for longer than almost anyone else in the marketing world.
The fact that he grew up in Lincoln and it’s where I’ve spent most of my adult life (I grew up in Omaha, up the road) adds an extra layer of interest, but I’ve also found his work among the most compelling from any and every marketing “guru” I’ve ever followed.
Anyway, Perry wrote a very powerful, very influential book called 80/20 Sales And Marketing, based on applying the 80/20 Principle (made popular in business by his now-partner Richard Koch) in business and specifically in today’s selling and marketing landscape.
It’s full of a TON of ideas, but the most important is something that I’ve gotten on almost a gut level since before I read his book… And that his book clarified and added both language and dimension to…
The 80/20 Principle explains a “law” of nature. Basically, that 80% of effects come from 20% of causes. Or 80% of resources flow to 20% of resource-holders.
It’s a pattern that appears over and over and over again (even against attempts to foil it).
That’s not the especially compelling part.
The especially compelling part is that it occurs in layers.
That is, 80% of 80% of the effects (64%) will naturally come from 20% of the 20% (4%) of the causes. That’s what Perry calls 80/20-squared.
Add another layer, and you get 80/20-cubed, where 51% of the effects come from less than 1% of the causes.
As an entrepreneur, Perry challenges you (as much as he challenges himself) to find those less-than-1% of causes that contribute to 51% of your effects.
That is, what are the TINY things you do that have a hugely disproportionate effect on your results?
He calls these $10,000 per hour activities vs. $10 per hour activities.
With that said, that’s what I was thinking about when I came up with this…
Here’s the list of The 5 Critical Entrepreneurial Skills…
- Make sales (1-to-1, then with scalable marketing).
- Ensure products/services are delivered at a preeminent level (note: not necessarily deliver them).
- Understand a P/L statement.
- Hiring/outsourcing/team building.
- Systems/process building.
Now, here’s a breakdown of my thoughts on each, and why/how they represent the 5 most-important skills you need to have or develop in your business/entrepreneurial journey…
- Make sales (1-to-1, then with scalable marketing).
All businesses start with the first sale.
The government doesn’t think this way. They think a business starts when you register your Articles of Incorporation, and pay your registration fee.
But you can do that and NEVER create a successful business if you don’t sell something.
So you need to find out how to make your first sale of your product or service. Then, your second. And so on.
This usually starts 1-to-1. Sometimes you don’t even have a product or service before you’re making sales. If you can build to demand, that’s fine.
The big thing though is that you MUST make sales.
Once you understand what works in selling your particular products or services, you can then package up your sales pitch in media (print, online, audio/video, etc.) and sell using scalable marketing methods.
The thing is, you almost always have to start with 1-to-1 selling to find and refine your pitch before you can make the scalable marketing methods effective.
And what about outsourcing? Well, you CAN do that. You can hire sales people. You can hire marketers and copywriters. But if you can’t sell your product or service yourself, you should probably find one that you can.
Then, you can be a better client/boss and guide to anyone you bring in to help you sell in the future.
- Ensure products/services are delivered at a preeminent level (note: not necessarily deliver them).
As an entrepreneur, founder, or business-builder, it’s not necessarily your responsibility to deliver your products or services. In fact, for your business to be scalable, you shouldn’t be a bottleneck.
However, it is your responsibility to ensure a GREAT customer experience, where your customers feel like doing business with you was their best possible option, and are ready to refer you to their peers.
Maybe you do deliver your products or services (this is especially common in consultant-level and solo service provider businesses).
Maybe you don’t touch product or service delivery.
Either way, you should fully understand the customer experience from the first moment they’re engaged with your business until the last.
And especially, you should make sure that your business is set up in such a way where the product or service that they are receiving goes above and beyond anything else available to them to solve the same problems that your offer solves.
- Understand a P/L statement.
Many people think Entrepreneurs should be their own bookkeepers, tax preparers, accountants, and so on.
Most of those people have an accounting degree, and are NOT used to being responsible for sales.
That said, entrepreneurship is messy financially, and you MUST know your way around all the finances of your business.
You should be able to read your bank statements, P/L statements, tax documents, and every other document or report that represents the financial health of your business.
This is critical for keeping your finger on the pulse of your business, but also to prevent you from getting into all sorts of financial messes including being taken advantage of by a dishonest employee.
Know your numbers.
- Hiring/outsourcing/team building.
If you want to build a SCALABLE business that makes you money when you’re not directly working in it, you will need other people to be working in it, too.
The most important part of that is knowing how to be a good boss and manager of people.
This is a very deep subject, and expertise, like many things, is best-developed through trial and error.
What you should know is that most people will love to excel when given the right context and opportunity, and you should do everything you can to enable that.
But also, given the wrong instructions or setup, most people can fail at a task that you think is remarkably easy.
It’s a balancing act. What can you do to give people all the tools they need to be successful, while also getting out of their way for them to outperform even your best expectations?
- Systems/process building.
For a business to be successful when the owner isn’t there (and frankly, to be successful when the owner IS there), you want systems and processes.
This is where you take all the repeatable steps that people do in your business and document them, and make them a step-by-step system.
The benefit of this is twofold. First, it gives you very repeatable, scalable results from important business tasks/processes. Second, it gives you ample opportunity to optimize and improve results.
For your business to grow, you need BOTH benefits working to your advantage.
Back to step one…
Speaking of selling, registrations for my Story Selling Master Class opened yesterday.
It’s been my experience that using stories in EVERY selling situation has improved my results across the board. This is your one chance to get in my head and learn all my secrets.
And now — by popular request — I did add a 3-payment option for registration. You pay just $197 today, then make 2 more payments over the next two months.
You’ll be done with the program and applying what you’ve learned before the last payment is due.
So far, this is only on the registration form.
Click here to register — where you can now choose the 3X $197/month option.
Yours for bigger breakthroughs,
Roy Furr
