To succeed at business, you have to be good at lots of different things. First, you have to be charismatic and persuasive if you are going to convince anyone that you’re worth investing in. You are on your own at the start so if you do not use your initiative and persevere, you will quickly fail. Once you’ve managed to establish the foundations of your business, you then have to be reliable if you have any chance of convincing prospective employees that they should stake their livelihood on you. People will look towards you for their financial security and if you cannot support them, you will not be able to retain those people and you will not be able to grow your business. It requires more than steadiness though; you have to know how to lead. You may be able to pay everybody’s paycheck every month but if you cannot manage to motivate your employees, you will not get the best out of them and your investment will not stretch nearly as far as it could. Managing your resources (including people) is another crucial skill because you will have a lot of different options. With all the possible variables and combinations of how best to direct what you have towards your goal, you will need to find the exact paradigm that gives you the best returns. In a broader sense, you will also have to be able to always see the bigger picture. Someone who worries about every single detail themselves will soon be overwhelmed. Without delegation, you’ll burn out before you start to turn a profit. Running a business also necessitates that you are able to work on many different things at once. This may be tricky especially since research shows that humans aren’t very good at multitasking.
A lot of what it takes to succeed in business is social skills. You have to be everything to everyone: to your shareholders a trusted figure who realises the weight of their fiduciary responsibility, to your colleagues a useful, productive, reliable worker, and you have to be yourself to everyone else in life (striking a balance between home and work is important whatever role you have). However, an absolutely critical skill is being good with numbers. If you have had any success in the world of business at all, you can probably find your way around a calculator, but if you are going to excel, you need to become a whizz. Business in its simplest form is all about numbers: your costs or overheads need to be less than your revenue so that you can make a profit. It gets a lot more complicated of course, but if you are not as confident with maths as you could be, here are a few things to watch out for, and a few things to make your life easier:
Every business needs a clear, concise set of prices. If you decide different prices for different customers, you are playing a dangerous game that could lead to legal challenges. Besides, what you charge depends on a lot more than who is paying. You need to ensure that your prices are sufficient to cover your costs and leave a little extra besides as well as being competitive in your market. Calculating these numbers can be especially difficult if you run a small business and your services are dependent on a specific client’s needs. Getting an estimate and conveying it to the customer is what you’ll be doing all the time (hopefully) but if you do not get the balance right between asking for enough to survive but not so much that you won’t be hired, then you’ll be in trouble.
Customers are not the only people that you have to talk money with though. Developing a consistent and fair pay structure is important to every business. It is an indictment on the contemporary business world but the fact that equal pay for men and women needs to be codified in law is embarrassing. It was enshrined into US law in 1963 by John F Kennedy but it is not as strictly enforced as one might hope, a fact obviously demonstrated by the still present disparity of women earning 76 cents for every dollar a man earns on average. Iceland recently became the first country in the world to mandate that this disparity end in both the public and private sector with failure to comply risking fines. If you put the law aside for a moment though, paying your employees fairly for the work that they do is your moral imperative.
An area of business where you certainly don’t want to make any rookie mistakes is with your taxes. Hiring an accountant to take care of all your books is a good idea however well you think you can do it yourself. With a dedicated person, you can have a greater peace of mind considering the risks. The IRS will carefully check your returns and if they find one thing that doesn’t make sense, they could decide to initiate an audit. This takes time on your part that could be better spent doing anything else. You do not have to have knowingly been committing fraud to risk fines or prosecution (if you are found guilty, it will be a felony charge that could leave you in prison for up to five years). A simple error in a document can bring you all sorts of unwanted attention. When it comes to taxes, it is better to leave the numbers to an expert.
A final consideration when running a business is how much money you should spend in order to save money. That may sound rather counterintuitive but with the risk of cybercrimes now more pronounced than ever (research has suggested that one in four businesses has been subject to attacks), investing in the appropriate software is a price worth paying, especially since it can be a lot cheaper than having to completely rehabilitate your computer infrastructure.
While people skills and managerial savvy are important in business, getting to grips with all the numbers is what can be the difference between succeeding and failing.