When it comes to successfully owning and running a business, passion for what you’re doing is critical. But it’s not enough. Having a thorough understanding of general business knowledge, and appreciating the value that knowledge brings in determining if you’ll succeed or fail, is also key.
It should be obvious to any business owner, or aspiring business owner, that having at least a basic understanding of principles like cash flow, liquidity, supply and demand, risk tolerance, and return on investment is mandatory for running a business.
But, you have to understand that it doesn’t stop there.
If you make widgets, you can’t simply think that you can just be the best widget maker around and customers will flock to you through osmosis. Just being the world’s best widget maker alone often isn’t enough.
Even if you have no interest in sales or marketing—or assume you’ll just get salespeople to do that for you—you need to get comfortable with both. If you hate all the rules, regulations, and hoops you often have to jump through when running a business, you can’t ignore them. You have to get familiar with them.
Owning or running a business often requires that you do things that make you uncomfortable or you may not enjoy doing. If you want to be successful, you’ve got to embrace that uncomfortableness and welcome the discomfort with open arms.
With that in mind, taking the time to build your business knowledge in every area of your business, especially the following areas, is vital in helping you thrive.
Overlooked facets of business knowledge
Unlike formal business education, none of these areas requires going to school or paying ridiculous amounts of money and churning endlessly through courses and classes to learn them. Once you understand the basic concepts, these are each best learned through simple practice. It’s like driving a car, the only way to get better is to actually do it.
Thanks to ever-changing consumer interests and the growth of available delivery options, the marketing landscape is always evolving. In just a single generation, we’ve seen advertising and marketing options change dramatically. It wasn’t that long ago you could count your available marketing channels on one hand—newspaper, magazines, TV, billboards. Today, the list of available outlets is virtually endless and continues to grow and shift on a regular basis.
Prior to the 1970s, ads were very much to-the-point. There were no frills, extras, or fluff. During the 70s and 80s however, the way ads were presented changed and marketers focused on the emotional aspects of their products and services. Unfortunately, this led to some distasteful practices and consumer distrust of ads began to rise. Now, 30+ years later, that mistrust has grown, with 70% of consumers skeptical of advertising.
Today, when you think of advertising or marketing, you need to think in terms of transparency, honesty, and community. Factors like how well-made your product is, how you treat your employees, and how well you work with other companies hold arguably more marketing power than simply buying ad space. You need to spend less time looking for the latest and greatest marketing channel and more time and consideration into the message you and your company are presenting to the world. Focus on delivering a consistent, positive message; do whatever you can to ensure a positive customer experience; and always be honest, authentic, and transparent in what you’re doing.
Never just think in terms of traditional ads—continually look for opportunities to put yourself in front of potential customers. Depending on your business, options like social clubs, public speaking, and volunteering can all be powerful marketing tools. And best of all, they cost you nothing but your time.
Salesmanship is defined as “the skill or art of selling” and the “ability or effectiveness in selling.” More than just in-your-face-sales, salesmanship is the subtle art of persuasion. It’s about being able to get people to do something while also creating lasting relationships.
In the past, the responsibility of sales went to those folks working in the sales department. Their goal was simple—sell, sell, sell! Creating relationships, retaining customers, or servicing them wasn’t necessarily on their radar. The problem is though, that singular focus only worked in the short-term by only bringing in new sales. That tactic rarely does anything to acquire the more valuable, faithful, long-term customers.
Today, you’ll rarely come across a job that doesn’t have some element of sales attached to it. Being able to effectively persuade people, and build relationships, is also important in the success of business owners, managers, contractors, bloggers, charities, and just about every other job out there.
Effective salesmanship is demonstrated by the ability to communicate effectively; maintain a positive disposition; display confidence; always be courteous, patient, and honest; have an open mind; and actively listen.
I think we can agree that saving money is a habit you should adopt to be successful both in your personal life and in business. However, like a lot of other things, it can be taken too far. You need to acknowledge that there is a point at which you can’t reduce your costs anymore or you risk producing a lesser quality product. You can only cut costs and trim the budget so far before you can no longer support the business and go under.
So, it’s important that you expend more energy in figuring out ways to bring more money in, than you do to save it.
When you are presented with an opportunity to invest, learn to recognize, compare, and analyze the potential end results before making your decision. Resist the urge to invest in “high risk, high reward” opportunities, especially when your business is in its infancy. Don’t get caught up in the excitement of “potential.” More often than not, you’re much better served playing it safe. Never invest without investigating the opportunity carefully and ensuring that the reward, monetary or otherwise, is worth it.
Recognize the significance of investing in yourself and the nonfinancial value investing can have on both you and your business.
Just being proficient in business fundamentals, marketing basics, and salesmanship and knowing how to apply all of them isn’t enough. To be truly successful, you also need to spend time studying human nature.
Contrary to our modern, methodical society, genuinely thriving is more than A + B = C. You have to know who you are doing business with and legitimately understand their methods, strengths, and weaknesses. We are all different, so different approaches and techniques will work on different people. You make your life easier, and business better, once you learn how to quickly figure out which tactics to apply to which individuals.
By understanding human nature, business owners can manage and motivate employees easier. Employees are better able to quickly gauge and identify the most effective way to interact with a customer. Individuals can make better choices, help others feel valued, and build more meaningful relationships.
You can study human nature every day by paying more attention to what’s going on around you and how people are reacting. Put yourself in the shoes of others to see things from as many different points of view as you can. Recognize how you feel when those around you are happy, sad, or angry. Watch how people interact in large versus small groups. Observe the way different folks react to similar situations. Read biographies to get a better sense of how our reactions to circumstances and events today compare to those many generations ago. (Spoiler: they are incredibly similar.)
When an opportunity presents itself, make sure you have the discipline to pump the brakes and take the time to evaluate all the pieces before you commit. It can be far too easy to devote far too much time to something that is of minor importance and not nearly enough to something of major importance. Usually this is because of our ingrained propensity to first tackle things that are enjoyable and/or easy for us—saving the difficult and annoying stuff for later.
Be mindful of what you worry about. Don’t let misplaced worry cause the little things to turn into big things (in your head).
Maintain a broad outlook and vision to avoid getting stuck in a rut. Always keep your eyes on your high-level goals to help keep all the little things in perspective. Don’t make snap judgements and set aside time each day to reaffirm the relative importance of each task, problem, project, and hurdle you’re facing.
Having a firm understanding of business knowledge will help you recognize opportunities and create even more opportunities for yourself. And while that business knowledge can certainly include formal education, training, and instruction, it doesn’t have to. The 5 things laid out here can be arguably more important—how many stories have you heard of someone who didn’t finish high school, but went on to build a hugely successful company? I guarantee that person understood salesmanship and was fluent in human nature.
And like most things, the way to improve and become remarkable at these skills is to practice them as often as possible. You may stumble a bit at first, especially in those skills that make you uncomfortable, but how often is anything worthwhile easy right out of the gate?