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We have gone round the mulberry bush many times about a lot of things. But I don’t recall any really to the point discussion on specific skills and abilities a person needs to have to run a successful business. It seems to me although a person could luck out; that they are much more likely to be a success in their business if they have certain specific skills and abilities.
I’m not talking about having a product that is competitive. It is a given that if a person isn’t a competent carpenter, or whatever, and can’t hire one who is they don’t have anything to sell.
To start things off: To be successful a person must have a working knowledge of Accounting and Financial Management. Accounting is knowing how to record all the business data and make sure it is accurate and useable. Financial Management is being able to use the data to make decisions and plans. For example: Everyone in business should know such things as their ROI(Return On Investment), Inventory turnover, Timed Cash Flow Schedule, etc. To get that they need to accurately record data and then be able to calculate from that data.
Also, everyone needs to know Financial Control. This means knowing how to keep someone from ripping you off without your knowledge. This means knowing the methods and costs of various methods of Purchasing, Supply and Inventory Security and Control, Check Writing Security, Access to Funds, Checks and Balances on your Bookkeeper, etc. By the way just cause your bookeeper is your wife doesn’t mean she shouldn’t have controls, just ask any number of guys who’s ex walked out with the cash and the computer.
Contributions to the Skills and Abilities List?
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I'll mention Leadership, Strategic Vision, Estimating & Job Costing, Coaching, Sales, and Information Technology only because they are among the skills I see as being so obviously weak or missing within the Building & Remodeling Contracting Industry. I am sure the comprehensive list can go on and on.
*The ability to delegate. Good topic FredB!
*You gotta LIKE people and have the ability to see them as equals.Confidence in yourself is very important. If you don't have it, then you better work for someone else. Good business people smell fear and uncertainty like wolves do and they stay away from it. Bad business people smell it and take advantage of you.Common sense.......without that, you're sunk.You need things that no one can teach you.Ed.
*Ed:Talking about hitting the nail on the head. Good post.
*friendly, courteous, obedient, cheerful, thrifty, brave , clean & reverent... ok.. maybe you can get by with out the reverent and trifty..sometimes the trifty gets in the way of investing in our future... and i'll gladly trade the reverent for leadership.....since business is always about people... good leadership is another leg of the tripod...
*The ability to manage your finances. Not just business but household too. Knowing when to make capital investments in new equipment. Understanding and being able to implement terms like 'point of diminishing returns' and 'opportunity cost'.I know some really good craftsmen who are having a hard time making it on their own because they don't understand how to 'make money'.I know a few average guys who are very successful because they do.Make your business a top priority. Put it just behind keeping your wife happy.Don't be afraid of 12 hour days. Running your own business is not a 9 to 5 affair.Keep impeccable records. Know where every PENNEY goes. Save and file every reciept and keep it organized so your accountant can figure it out. Have a good accountant/advisor. How many small business people miss deductions because they do their own taxes to save a few hundred dollars?Rich
*rich... that's a good example of false thrift...some of you guys are home builders.... but our business is remodeling.. and we are service, service, service.....i know a lot of guys who shop, shop , shop to get the price down on some materials or subs..but they have forgotten about the cost of doing business .. dealing with material suppliers and subs whop will help us service our customers..
*A lot of good stuff already posted. I think the people skills is the most important. You have to have some ability to at least vaguely grasp the financial aspects, but...Everything can be delegated, but I think the people skills is the most difficult thing to delegate.You have to have an idea, some drive, people skills, enough financial knowledge to keep from being robbed by a delegatee, and a willingness to delegate. A rich uncle doesn't hurt.Rich Beckman
*How to balance a check book. Amazing how many folks I've helped out over the years who couldn't balance a checkbook. One took out a loan for operating capital while he had plenty of money in the bank to do the job. He thought the bank was really great when they gave him fast service and a good rate.He got serviced fast all right! Emphasis on serviced!Rich, one of the reasons I harp so much on financial skills is because lots of guys/gals have people skills. But they never make any money because they don't understand the detail fundamentals about accounting for it and keeping it.Another skill is knowing the law that applies to your business. Without knowing that you don't know if you are walking the plank or just crossing a bridge.The post saying that we must treat everyone just like we want to be treated is right on. Don't know how many people I know who constantly grouse about not being able to get good people. But at the same time they treat their employees like crap. One I know didn't even make provisions for a toilet/porta-pottie on the job site. "I didn't hire 'em to crap. I hired 'em to work. Let 'em do that on their own time".