How to Succeed in Managing a Small Business

Small business owners need grit. And they need a whole lot more if they want to truly succeed as a business in their industry.

The startling truth is that one-third of small businesses with employees will go out of operation within their first two years, and more than half will close their doors by the end of their fourth year.

Researchers Knaup and Piazza found that if a business can make it past the critical 4-year threshold, they stand a much better chance of surviving and growing (you can read more about some of their research studies here.

To get your business past the 4-, 5- and many-more-year-mark, here are some key skills you’ll need in order be successful as a business owner:

• Business know-how – You can’t run a pizza shop without knowing how to make pizza. But there’s more to it than that. Starting a business means entering a competitive landscape and going up against others who already know what they’re doing – and likely have been doing it successfully for years. In order to stand a fighting chance, you need to know the market inside and out, understand your key competitors and have the business skills to stay in the ring.

• Basic management skills – It’s one thing to have a great business idea and have the skills to do the job well. It’s a whole other thing to manage the business itself. Making decisions about every little aspect of the business and understanding the impact those decisions will have requires at least some degree of training in business management basics.

• Proper funding and money management skills – You’re likely going to need start-up capital to get your idea off the ground. And this period of “starting-up” takes longer than many people think. Do you have a plan for securing initial funding from lenders and investors – and more than that, do you have the capacity to manage your cash flow on a monthly basis? Regardless of how financially savvy you are, it’s a good idea to hire an accountant – and to do so right away

• People skills – Managing a small business also requires you to manage a team of employees. Hiring the right team – and ultimately retaining them – can be the difference between your business succeeding or failing. Moreover, you also need to be at ease with your customers. You will spend a lot of time playing the roles of salesperson, customer service rep, and every title in between. It’s important to remember that there’s a human behind every transaction and to treat your clients, employees and everyone you interact with in a respectful way.

• Time-management skills – Learning how to prioritize tasks that will move the needle on your business is essential if you want to remain successful without completely wearing yourself out in the process.

Succeeding while managing a small business requires you to have a combination of hard and soft skills. Passion, though important, can only take you so far. To truly commit to your business and see it succeed, know your limits (and when to ask for help), and focus on improving any of the above areas you need to work on.