Building a successful company from scratch is no mean feat, which is why only a fraction of new business ventures stay afloat beyond the first three years, and less than 25% make it past age 10. You may have a great idea and strong domain knowledge, but none of that matters if you lack the core skills necessary to get things done.
Beyond certain macro factors such as cheap credit, bullish markets, and a robust economy, building a company from scratch ultimately boils down to certain individual skills and characteristics that remain dominant among successful founders.
In this article, we dive deep into these common sets of traits to help aspiring entrepreneurs better evaluate their current standing.
1. Communication
Whether it is with employees, suppliers, co-founders, or customers, communication remains at the core of organizations. The ability to convey thoughts, ideas, and expectations in a clear and concise manner is a powerful trait that can make or break business endeavours.
Many people ascribe this to a superpower, given its far-reaching impacts, but unlike a superpower, this is a skill that can be acquired through practice. Skilled professionals with strong core domain knowledge often fail at business, because of inadequate communication.
2. Financial Literacy
Most entrepreneurs make the mistake of side-lining accounting and financial management as inconsequential to core operations. Business owners fail to even differentiate between accounting basics such as cash and accrual basis of accounting, let alone the intricacies of cash flow and balance sheets.
There are certain accounting processes, systems, and best practices that entrepreneurs have to familiarize themselves with. Also referred to as the accounting cycle, it is the first step in what ultimately leads to efficient and strategic financial management.
3. Specialized Industry Knowledge
A critical trait that remains common among most successful founders, is specialized industry knowledge. In the face of stiff competition, and uncertain marketing conditions, it is those with strong domain experience and skills that manage to survive and overcome the odds.
While this knowledge can be gained by just dipping your toe in, and working through the challenges that come your way, along with books, courses, magazines, and more, nothing beats the hands-on experience working in the belly of the beast in relevant sectors.
For example, if your goal is starting a real estate brokerage, you can waste years, and a substantial amount of money grasping the steep learning curve, or you can work under an established realtor to learn the various tricks of the trade on someone else’s dime.
4. Leadership
Unless you run a sole proprietorship, a company requires employees, and you cannot manage, motivate, and inspire your employees without adequate leadership skills. While introverts are known to have built successful companies, they are exceptions, not the norm.
Leadership is a vast and growing body of knowledge that is only developed in individuals over years of practice. This is also why a vast majority of successful businesses are built by entrepreneurs in their 40s, and not 20-something college grads.
5. Delegation
A vast majority of business owners are merely freelancers, who end up working for their businesses while chasing the dream of becoming their own boss. A company cannot be scaled unless work is effectively delegated, with the right balance of authority, responsibility, and accountability.
Following the initial days of grunt work, your role as a business owner should ultimately revolve around decision-making, expansions, and innovations. This is only possible if the core work is delegated, and you remain free to focus on other critical aspects.
6. Problem Solving
Problem-solving is the fundamental nature of business. The very essence of going into business involves providing a product, or service that helps solve the problems of customers. Business owners start building confidence and skills as they start to face and overcome problems on a regular basis.
Successful entrepreneurs spend the better part of their day putting out fires and solving problems as they arise. Over time, they learn to embrace challenges and develop internal systems and frameworks to effectively tackle a wide range of issues.
Final Verdict
All of the critical skills and characteristics mentioned above can only be acquired by years of practice and experience.
In a sense, the only skill you require to build a company from scratch is the skill to keep going, and not give up.
