The road to entrepreneurial success is not easy. You need a decent idea to start with. Additionally, you also need some hard skills for entrepreneurs. These hard skills are (as you guessed it) hard to come by. Let us see, what are these skills and how you can address the skill-gap.
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What are hard skills?
A hard skill is the expertise of technology. It involves working with technical things like equipment, data, and software. On the other hand, soft skills are related to interpersonal skills. However, one question may arise in your mind. Why do we need to differentiate between hard skills and soft skills?
Why do we need to differentiate between hard skills and soft skills?
- Both these types of skills require very different kinds of training as well as different kinds of trainers.
- Hard skills are the bare minimum required to execute the tasks. Soft skills add on to that. They help to improve efficiency while hard skills are must-have to get things done.
- Hard skills also bring costs down. If the entrepreneur can do X, Y, and Z stuff themselves, they will save money. Keeping costs low can be the difference between survival and perishing!
Critical hard skills for entrepreneurs
Research on the Stanford MBA alumni shows that entrepreneurs typically take more courses compared to non-entrepreneurs. This is attributed to the need for hard skills for starting and running a business. Additionally, German researcher J Wagner demonstrated that the way entrepreneurs use knowledge favors the acquisition and usage of hard skills for entrepreneurs. This is attributed to:
- Entrepreneurs must have basic knowledge in a wide variety of areas( in other words, they are generalists)
- People have self-selection. People with multiple skills take up self-employment over paid employment.
Developing the hard skills
It is ironic that hard skills are actually easy! It is easier to teach someone how to use MS Excel than to teach them how to close business deals. Therefore, hard skills are easier to learn. Here are some of the broader areas of hard skills for entrepreneurs:
- Leadership skills
- Business planning skills
- Business executing skills
Among these, business planning and execution can be part of the hard skill development. In this regard, you can develop hard skills in different functional areas of management.
Hard Skills for Entrepreneurs
| Management functional area | Hard skill for entrepreneurs |
|---|---|
| Strategy | > Business plan development > Strategic assesment using tools like SWOT analysis, Porters five forces and Ansoff matrix > Strategizing, Goal setting and managing crisis. |
| Finance | > Financial planning and projections > Fund allocation, cost calculations,etc > Basic accounting skills |
| Marketing | > Salesman skills: lead generation, nurturing and closing of sales > Managing relationship with customers > Social media marketing skills > Branding |
| Digital | > Data analytics > Web development, SEO, etc |
| Human Resources | > Hiring talent that can relate to your business idea > Training and development |
A deep dive into the hard skills
Now, let us look at each of these skills in detail:
Strategy
Broadly speaking, entrepreneurship comes under the strategy. The strategy is a functional area of management that deals with assessing business potential, threats, and opportunities. Additionally, it also deals with executing business projects and aligning them to the organization’s long term vision.
Firstly, the founders are expected to prepare a well drafted business plan. This can help them to pitch their ideas to investors. Additionally, it may also help them to re-iterate their course of action. Secondly, the entrepreneurs must know how to assess the market. They are espoused with the responsibility to grow the firm against all external forces.
Finance
Managing finance is a critical skill every entrepreneur must know. At least reading a balance sheet. Developing the business plan also requires making financial projections for the costs and revenue. The more detailed the financial projections are, the higher the chances of getting early funding.
Another critical skill is to manage the cash flow. Most businesses fail due to cash flow problems. Startups must have clear projections for the next six months. Firstly, the founders must appropriate revenue streams. Secondly, they must also address the disbursement of the fund. Proper allocation of funds can boost growth.
Marketing
Marketing connects the firm with the customer. This connection provides the flow of value to the customer. Also, it provides the flow of money to the company. Consequently, the work of the founder is to maximize this flow. This is done through marketing efforts. The entrepreneur must know how to optimize the 4 Ps of marketing to their advantage.
People don’t see your product. They see your brand. Therefore, it is critical to plan. A founder must know how they see their brand. They must be aware of the story their brand tells. They are the storytellers. As a result, founders must develop this hard skill for entrepreneurial success.
Digital
Managing the digital front is also an important hard skill for entrepreneurs. There are a lot of things to handle on the customer front. Additionally, there are even more things to handle within the organization. A decent understanding of how websites work, e-commerce, social media, etc can be quite useful for an entrepreneur.
A good business plan can further benefit from insights. Therefore, the founders are expected to be thorough with software like Excel, PowerPoint, etc. Additionally, it is really helpful if the founders know the basics of advanced data analytics like regression, decision tree, etc. Another aspect where hard skills can help is web development and SEO. Knowing these skills will help the founders ask for specific output from the developers. It will also help troubleshoot some problems.
Human Resources
The employees can make or break a firm. It is critical to hire people who can give their best. Also, it is important to have people who understand the firm’s ideologies. People who align with your vision will be able to work towards a common goal.
Additionally, training and developement is a big responsibility of the founders. This aspect of HR is definitely a plus point. Some learnings that the founders may have would be novel and specific. It is important to know how to transfer these skills to your employees.
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