As a business owner or director you need many different skills for your business to succeed.
You may be a first-class engineer, but unless you can sell your product, your business could fail. Likewise, you could be a wizard financier, but unless the people you employ are well managed, your business could collapse.
Running a successful business means being able to access many skills. As your business grows, the range and complexity of skills your business needs will grow too.
This guide outlines the kind of skills that businesses need to function successfully and outlines the skills required by those heading a business, e.g. people-management, leadership, team-building and strategy-setting. It will advise you on where to go to find help and training to ensure all these skills needs are met in your business.
The core skills all businesses require
As a business director or owner it's essential you can identify and meet the core skills your business needs to be successful.
These skills will be the same whatever business you run - whether you're a self-employed graphic designer or you head a manufacturing company employing dozens of people.
There are intangible skills you will need, such as leadership skills, the ability to cope with long hours and hard work, and the inner resources to deal with stress and risk-taking. They also include strategy-setting and the ability to build and manage a team.
There are also functional skills that all businesses need. The smaller your business, the more of these skills you will need personally:
- finance - including cash flow planning, credit-management and managing relationships with your bank and accountant
- marketing - including advertising, promotion and PR
- sales - including pricing, negotiating, customer service and tracking competitors
- procurement and buying – including tendering, managing contracts, stock control and inventory planning
- administration - including bookkeeping, billing, accounts preparation and payroll handling
- personnel - including recruitment, dispute resolution, motivating staff and managing training
- personal business skills - including computer, written and oral communication, and organisational skills
To run a successful business it's essential you recognise the limits of your abilities. So, as a business owner or director you also need the skill to know when it is best to hand over tasks to others by either:
- delegating
- recruiting
- outsourcing
The CEGEP and school board SAEs offer companies and organisations continuing education and labour force training services in many different sectors of activity. For more information, visit the SAE – Le Réseau public des services aux entreprises du Québec website (in French only) or contact the nearest CEGEP to learn about the services offered.
Skills required by growing businesses
As your business grows, the skills your business needs to access will grow too. For example:
- as your finance arrangements become more complex, you'll need staff to, for example, manage company accounts, and find and manage outside investment
- your marketing may need to be more sophisticated - therefore you'll need to understand, for example, advertising and the media
- the number of employees may increase to a point where you need to hire HR professionals, who may also help your business comply with employment law
- if your business is involved in a sector where health and safety is particularly important, e.g. construction or manufacturing, you may need to hire health and safety professionals
- • new equipment and/or processes in your business may mean that you need to hire technical specialists
- as your IT system becomes more complex, you may need to have in-house IT knowledge
As the owner or director of a successful growing business it is essential that you recognise when new skills are needed and you take the right steps to meet them.
You are unlikely to be able to find the time or have the ability to meet most of them yourself. Consider:
- building a management team
- delegating responsibility to other staff
- recruiting to fill a skills gap
- outsourcing the work to a specialist contractor
- training existing staff to meet your skills needs
Key skills for owners and directors: leadership
Strong leadership and a sense of direction are hallmarks of almost all successful businesses. Good leaders offer direction to people, get them to share his or her vision for the business, and aim to create the conditions for them to achieve results.
You can show leadership to staff by:
- involving them in decision-making
- providing personal encouragement
- recognising and rewarding good performance
- helping to build their confidence to use their own initiative
- inspiring them with a vision for success
- ensuring good two-way communication
Both you and your directors will need to use different skills at different times - there's no "one size fits all" approach to leadership. In addition the right leadership style will depend on your business and your own character. A softer, mentoring style of leadership may be appropriate - or you may opt for a more charismatic approach.
Key skills for owners and directors: strategy
All businesses need a strategy to succeed. A business strategy is different from a business plan. It is longer, looks further ahead and is more visionary.
It's easy to lose sight of the larger context when you're busy running a business, particularly a small one. But spending time on strategy will help you:
- know where your business is heading and how to position it to get there
- understand the challenges and opportunities your business faces and the best ways to address them
- improve the overall performance of your business
Importantly, the task of forming a strategy for your business should not be delegated. Rather, as your business grows you can spend more time on it as others handle day-to-day activities.
Tools to help you determine strategy
Many business tools can help you determine strategy. A popular one is a SWOT analysis, in which you:
- consider all your business strengths
- consider all your business weaknesses
- identify any business opportunities
- identify any threats facing your business
Analysing your results carefully will show you how to build on strengths, resolve weaknesses, exploit opportunities and avoid threats.
Another strategy tool is a gap analysis, in which you analyse in detail where your business is now and then consider where you want it to be in the future. Next, you analyse the gap between the two in order to find ways to bridge it.
Forming your strategy
A business strategy should be realistic, putting in place measurable targets for the medium term. It should be reviewed regularly.
Key skills for owners and directors: delegation
Delegating involves passing on the responsibility for completing a task or controlling a process in your business. You may find it difficult if you are used to completing most tasks yourself.
Some business owners and directors fear losing control. Others fear nobody will be able to do a task as well as they can. Some resent the time it takes to train people to take over, and some insist they want to remain in touch.
Effective delegation, however, makes good business sense because it:
• frees you up for forward and innovative business thinking • ensures your team's potential is maximised • builds trust between you and your employees
How to delegate
Write a list of everything you do. Ask yourself whether it is essential you do all these tasks. Could your time be better spent? Could others be trained to take over? Might others even be better suited to the task than you?
Delegate if it will prove more cost-effective to do so.
Remember though:
- Training can take time. Don't expect to reap dividends immediately.
- Others may do things differently to you - but their way could be better.
- Your team members should feel supported and have their work reviewed. However, overbearing supervision can prove counter-productive.
- Good communication makes good delegation.
- Delegation might be best achieved through outsourcing.
Remember that you remain ultimately responsible for delegated tasks. You cannot delegate control of your team or your final responsibility for its success or failure.
Above all, you cannot delegate your responsibility for the direction in which your business is heading.
Key skills for owners: building a management team
Building a management team is an essential part of any growing business' success. It is not just the concern of big business.
A dynamic management team that works well together will impress clients and give your business the competitive edge. A badly run management team is likely to put off customers and investors however brilliant an idea or product your business may offer. At worst, it can prove the undoing of a business.
When building a management team it is important to:
- Bring in a mix of skills that complement and reinforce each other rather than simply duplicating each other.
- Find people who are team players, who trust each other and will interact well.
- Define everybody's role and responsibilities within the team clearly. Relate these roles back to your business strategy.
- Ensure those you employ are in tune with the goals of your business and the way in which these will be achieved.
Remember - you may have to look beyond your existing employees to build a successful management team.
Key skills for owners and directors: managing your team
If your business is to work at maximum efficiency and achieve its full potential, all your employees need to work together as a well-functioning team. This means you must acquire team-management skills.
You may have different teams that need to be managed in different ways. For instance, it's just as important to manage your senior management team as it is to manage your more junior staff members.
For your teams to work well you should:
- ensure everybody knows their role
- set clear goals and communicate them
- put in place clear lines of communication
- clarify lines of responsibility
- involve all team members in decision-making as much as possible
- introduce ways to manage and resolve differences
- learn how to lead effective meetings
- encourage training and personal development
- build in regular reviews
- be a ready and willing listener
- encourage and promote diversity
- motivate team members
- reward initiative
Skills and training for company directors
When you take on the role of a company director you take on very clearly-defined responsibilities.
An obvious responsibility is ensuring that certain documents, such as annual returns, are filed with the government.
There are also non-legal obligations for directors, such as the requirements to form strategy and to manage your team well, which are necessary to ensure your business succeeds.
See the pages in this guide on key skills for owners and directors: strategy and on key skills for owners and directors: managing your team.
Training can prove very helpful for building both legal and non-legal skills areas.
Sources of leadership training
As a business owner or director you could benefit from leadership training, i.e. training designed to help you maximise your own and your business' performance.
Leadership training will help you:
- inspire your team
- influence others
- bring about positive change in your business
Leadership training is as much about personal development as it is about learning set skills through formal training. For this reason, mentoring is often chosen as the best way to develop leadership potential.
Mentoring is an informal, generally unstructured process in which a mentor, usually someone very experienced in business, spends time developing the inner resources of the mentee. It is not a teacher-pupil relationship. Rather, the mentor is more of a guide and somebody against whom ideas can be safely sounded out.
Networking is another important type of skill development for business owners and directors. A wide variety of business networks exists - including those for new businesses, young owners and women owners. These allow you to learn from people running similar businesses and facing similar obstacles.
Original document, Skills and training for directors and owners, © Crown copyright 2009
Source: Business Link UK (now GOV.UK/Business)
Adapted for Québec by Info entrepreneurs