Seven skills you need to nail before starting a business

More than a third of Aussie businesses shut down within four years. Here’s how to make your venture a success.

Financial management and customer service are the two most important skills for first-time business owners, according to an exclusive survey of 1000 Aussies who have gone before.

They identified seven key skills that a person should gain before taking the leap into entrepreneurship.

And with the Australian Bureau of Statistics showing more than a third of businesses shut down within four years, it’s worth heeding the advice.

FINANCIAL MANAGEMENT

The survey by business software company MYOB finds 45 per cent of surveyed small and medium enterprise (SME) owners and operators consider financial management skills a must.

Rates are particularly high among female respondents (50 per cent) and older respondents (57 per cent of Baby Boomers and 80 per cent of Traditionalists).

MYOB general manager for SME Emma Fawcett says business owners that are working with an accountant or bookkeeper can learn a lot from them about managing finances.

“To upskill, there are online courses, including free ones, to give you the basics,” she says.

“It’s also worth spending the time exploring the functionality in your business management platform and giving it a go – you can’t beat hands-on experience.”

MYOB also offers a resources hub to help small businesses with everything from understanding financials to managing social media.

CUSTOMER SERVICE

Customer service skills take out the joint top spot, also with 45 per cent of SME owners and operators rating it as an important skill.

“The personalised approach small business owners can take is usually a real selling point for consumers, ahead of their larger competitors,” Ms Fawcett says.

This skill is often picked up in previous jobs, whether the “customers” are internal colleagues, external clients, or people buying products and services.

Emma Fawcett says aspiring business owners can develop this skill by listening to podcasts or finding a mentor. Picture: Supplied

COMMUNICATION

Honing communication skills before starting a business is recommended by 44 per cent of respondents.

LinkedIn Talent Solutions senior director Adam Gregory says one way aspiring business owners can grow their skill set quickly and gain the necessary knowledge and accreditation is through LinkedIn Learning courses.

“LinkedIn has over 18,000 courses across various subject areas including business, creative and technical categories, with upwards of 60 new courses created every week,” he says.

On this topic, Gregory recommends Communication foundations or Communicating with confidence – both of which include a little more than an hour of video content.

LEADERSHIP

Just over a third (35 per cent) of SME owners and operators rate leadership as a skill worth refining before starting a business.

It was most valued by those in construction and trades (43 per cent).

Ms Fawcett says aspiring business owners can develop this skill by listening to podcasts or finding a mentor.

“Mentoring can be formal and organised, or it can be as simple as catching up with someone you know to be a great people leader for a coffee occasionally to discuss people challenges and opportunities,” she says.

There are also short LinkedIn Learning courses available, such as Top 10 rules for highly effective leadership.

Sarah Rudd started her sustainable products water bottles and coffee cups business, Caye Life, four years ago. Picture: Tim Carrafa

NETWORKING

This skill is recommended by 32 per cent of respondents, led by those in finance and insurance (46 per cent).

Sarah Rudd, owner of eco-friendly water bottles and coffee cups company Caye Life, says networking in the business community and via Facebook groups is “just vital”.

“It’s incredible what people are willing to share, particularly in those women’s networks,” she says.

“People in that space are going though the same challenges you are going through.”

Rudd says there are resources and freelancers available to assist with any tasks.

“With jobs you may not have the skills to do, you can employ someone for a few hours or few days,” she says.

“You don’t need to go into a business feeling you need all the skills. You can focus on where you think your strengths lie.”

LinkedIn’s Adam Gregory says there are more than 18,000 specific short courses available on the professional networking site. Picture: Supplied

MARKET RESEARCH

This involves having an understanding of what is already available and at what price point, and if there is a way to differentiate a new business from competitors.

The MYOB survey finds 31 per cent of SME owners and operators consider it important for a first-time business owner.

It’s particularly valuable to retail and hospitality businesses (40 per cent).

Gregory recommends a LinkedIn Learning course called Market research foundations, which is specially designed for beginners.

DAY-TO-DAY IT SKILLS

Almost a third (30 per cent) of small and medium business owners say this is a necessary skill set before taking the leap into working for yourself.

Ms Fawcett recommends making the most of YouTube videos and learning resources that come with business software products.

The MYOB survey also finds 26 per cent of respondents believe social media skills are important before starting a business, on par with project management skills.

One in five also advise brushing up on website design.

Originally published as Seven skills you need to nail before starting a business