Top 5 skills needed to start a business

Have you ever thought you’d love to start your own business but lacked the confidence to take the plunge? Don’t worry if you’re missing certain skills or experience — it’s never too late to get them.

If you need guidance, the company formation experts at 1st Formations are here to discuss the top five skills every entrepreneur should have when starting a business.

1. Financial management skills

You don’t need to be a maths wizard to start a business, but you’ll need to assess your finances regularly. If you want to incorporate your business, you’ll also have your personal and company finances to look after individually.

Financial management in business involves:

• Budgeting and forecasting
• Accounting and bookkeeping (you can hire a professional to help with this, but many entrepreneurs handle these tasks themselves in the early business stages)
• Cash flow management
• Tax calculations, reporting, and payment

The financial side of the business is crucial. Fortunately, numerous automation tools and professional services, such as the 1st Formations business banking service, can help you with this.

That said, solid financial management skills are crucial when starting a business to stay in control and understand its financial performance.

2. Communication skills

Whether you’re starting a business alone or have a partner on board, you’ll need strong communication skills to get on well with key stakeholders. This includes investors, colleagues, suppliers, clients, and employees.

Great communication skills are essential to ensure the business runs smoothly and all parties align on the business strategies and objectives.

It’s also a useful skill for networking and building relationships. As an entrepreneur, you’ll need to learn from others and have someone to lean on for support and guidance.

3. Time management skills

Starting and running a new business is a full-time job. Many entrepreneurs work six days a week (if not all week) and can find it difficult to separate work and home life.

If left unmanaged, stress can quickly and easily build up, causing burnout. That’s why good time management skills are essential when starting a business.

This will allow you to stay in control of your business and personal schedules and maintain a healthy work/life balance. It might be challenging initially, but your time management skills will help you find a sustainable rhythm that enables you to stay efficient, productive, and confident.

4. Leadership

You may not need to use your leadership skills straight away, but they’ll become essential when you take on staff and begin building a company culture.

As the business owner, your team will look to you for direction and inspiration. So, you’ll need confidence and leadership skills to develop a strong workforce that embodies and shares your company vision.

5. Resilience

Finally, resilience. Businesses face various uncertainties, competition, and challenges. One of the most significant risks is getting started.

Writing a comprehensive business plan will help you spot and prepare for many uncertainties, but it’s still important to have a backup plan in place just in case things don’t work out.

Learning from setbacks, maintaining a positive mindset, and staying flexible are key components to being a successful business owner. If something doesn’t go to plan, you’ll need the resilience, adaptability, and perseverance to get back on your feet and keep pushing your business forward.

Other useful skills for business owners

We’ve highlighted some of the core skills needed to start a business. Here are some others that could help you on your entrepreneurial journey:

• Technical skills: Depending on your industry, you might need to know how to use certain tools or software.
• Sales and marketing: These skills aren’t essential, as you can outsource them to a freelancer or agency. However, having sales and marketing knowledge helps launch new products and gain brand awareness.
• Customer service: Excellent customer service is paramount when building a reputable brand. Eventually, you’ll delegate this function to an in-house team or a third party, but you’ll likely oversee customer service yourself to start with.
• Negotiation skills: This skill is useful for negotiating deals with vendors, clients, and partners.
• Legal and compliance knowledge: Whether you start a sole trader business or incorporate a company, you’ll have certain ongoing legal obligations. It helps to have a prior understanding of this, but it’s not essential.