The Education of an Entrepreneur

Becoming an entrepreneur means more than just getting an idea and finding the financing to do it. Running a business on your own requires skill and knowledge. The question is what skills and knowledge? Do you really need an MBA? Stories abound about entrepreneurs who have set up and run a business without a college degree, some without even finishing high school. Are they the exception or is being an entrepreneur an art that you either have or don't have?

While there is no definitive answer to any of these questions, enough educational programs exist to indicate that a considerable number of people believe that establishing a successful business requires a learnable set of skills and knowledge. Even creativity can be nurtured. Having been down that path myself, I tend to agree, even though there are some intangibles that entrepreneurs possess that are not teachable. In my book you can't be an entrepreneur without those intangibles, but you may not be a successful one without the skills and knowledge component.

Looking at what is taught, there is a tremendous spectrum of knowledge being covered. The degree programs usually include the standard financial and managerial accounting, statistics, economics, strategy, management, marketing, finance, technology, and business law courses required by most business schools. To graduate with an emphasis in entrepreneurship, at least one course is required which covers the essentials of starting a business including writing a business plan. Additional coursework in small business management, negotiation, high technology or global business may also be included.

Other programs - high school, community college, continuing education, special purpose seminars - emphasize more practical aspects of running a business. Some teach how to find financing, others creativity or internet applications. The one common factor in every program is learning how to write a good business plan. But that can't be all that there is to being an successful entrepreneur (although it does indicate just how important knowing how to write a good business plan is). Which of these areas are necessities that you need to either learn yourself or partner with someone who has these skills or knowledge. And note that I have said partner, not hire, someone with these skills or knowledge. The necessities someone in charge, preferably you, needs to know or you are setting yourself up for problems down the road.

My list of Necessities contains the following items:

Startup Process:
Legal structure
Record keeping
Insurance
Choosing equipment, supplies, people
Choosing a name
Financial resources
Business Planning
Basic Bookkeeping
Basic Financing
Business Financial Management
Operations and Production Management
Basic Business Management
Marketing:
Sales
Public Relations
Advertising

While this may seem like a long list, each is critical to running a business successfully. All are covered in the Small Business Channel of About. The Small Business Administration provides courses and materials in each of these skills. Interestingly, a number of them are not covered in many business degree programs so just because you have a degree, don't feel you can give these items short shrift. What many business degrees cover are what I label "useful extras," items that a nice to have in your bag of tricks, but aren't crucial to the success of the business.

Once you have the necessities in place, you should be able to make any business a success. However, your education should not stop there. There are plenty of other areas of knowledge that it is useful to have in your pocket to pull out when you need them - or to give yourself new perspectives on some of the challenges you face. For starters, there is always more to learn about the necessities themselves. Keep hands on in how they are managed in your business, meaning you may hire a bookkeeper or subcontract it out, but go over the books regularly yourself - and continue learning more about current bookkeeping practices.

Here are some other topics you may wish to tackle as the opportunity arises.

Strategy

Strategy is one of the most fun parts of running a business, although some of the books and courses on it are so boring, it could make you wonder. Strategy is about alternatives. There are a large variety of ways to run your business and reach your goals. Strategy is the gameplan that you have chosen to get there. You will, undoubtedly, have a good idea of how you want to conduct your business, but with a little knowledge of alternative strategies, you may find a path that is even more productive and appealing. A good place to start is my feature on strategic planning. That will give you the basics from which you can easily move deeper if you find it useful to your business.

Accounting/Taxation

I sigh when I even think about this topic, but, as painful as it is for me to wade through, every new skill I have acquired in this area has been useful to me. Accounting and taxation skills directly affect your bottom line. Put this in your knowledge base and you will never regret it.

Venture Capital

I am continually amazed at how little is known by most entrepreneurs about venture capital, yet it is one of the most discussed funding sources available. If you see a need for a major influx of money somewhere in your business' future, learn the basics before starting your search. Nothing impresses as much as being knowledgeable about the process when you are asking for large sums of money.

Initial Public Offerings (IPO)

Many businesses start out with no intention of ever becoming a publicly traded company. Others have that as their goal. Whatever your initial expectations, conditions change. Your perspective changes. Learning something about going public will enable you to make a better choice and will most definitely serve you well, if you decide it is the right step for you.

Networking

Networking in the sense of making connections with peers, not computers, can be a major plus for any business. It can range from a support group of other entrepreneurs who meet regularly to memberships in associations and trade groups. Learn this skill and doors will open for you throughout the business community.

Personnel and Compensation

Many of us start with no employees or, even if we do have employees, we have preconceived notions of what a good working environment is or that we can afford. That is great for very small businesses. If you mean to stay a mom and pop, that may be sufficient. However, in today's environment competition for good employees is tough. Taking the time to educate yourself on good personnel and compensation issues allows you to offer the most attractive package to employees while protecting yourself.

Negotiation

Good negotiation skills can be learned. And they are useful not only is pursuing business deals, but in dealing with every person with whom you come in contact - employees, customers, suppliers. A successful negotiation does not mean you win and others lose. It means you find good solutions that meet everyone's needs. It requires good listening skills and keeping your brain engaged - both of which are useful to anyone, even folks who aren't running a business.

Conflict Resolution

Here is another skill that is useful in all parts of your life, not just in running your business. Even if you don't learn the skills yourself, learn about the services available in your community to help deal with conflicts. Many communities have mediation centers where for a nominal fee, mediators help find a solution to conflicts. This is far cheaper than pursuing problems in courts or in getting into angry confrontations.

Product Development

Once you have one product established you may be interested in expanding your product line, but how do you know how to do that? That is where the knowledge of product development helps. Product development needs to be a collaborative effort between marketing and production, one knows what sells, the other what is feasible to do.

Building a Culture/Team

Team building has been so popularized that it has become almost a negative in most people's minds. What is done in the name of team building is often bizarre and counterproductive. However, done right, it can add to the productivity of the business as a whole. There are very simple techniques used in a variety of successful businesses. Look for them and skip the hoopla ones.

Building Your Company's Vision

Chasing vision is second only to teambuilding in negativity for most employees. Countless hours get spent in writing and rewriting the vision. Once again, sidestep the hoopla and look for the simple answer. Vision can be powerful if done well.

Coaching

The latest fad appears to be coaching. Coaching involves just what it implies, helping someone perform more effectively in their chosen tasks. Coaching can come from within a business in which you help people do better in their jobs or external coaches can help the management team be more effective. Coaching is similar to mentoring, but is a more active approach in which skills are assessed, taught, and developed. The one caveat here is that many unqualified individuals have jumped on the coaching bandwagon. Investigate thoroughly any proposed coaching relationship to be certain it is the right one for you.

Change

Change is a big factor in business today, affecting every aspect of running a business. Learning as much you can about it, methods for coping, and what it means for your market makes sense. Change does not appear to be slowing soon. If anything, the pace appears to be picking up.

Creativity

Being an entrepreneur takes creativity. Whether it is looking for a new idea to develop or finding a new solution to an old problem, creativity is what sets the light bulb off. Not only is it fun to develop, but it is inspirational in many ways. Take a look at some of the creativity information on this site and see if you don't agree.

Managing Growth

This is a challenge we all look forward to when we are just starting out, but it can be monumental when it hits. Preparing yourself for what you need to do to manage your growth so that the business heads the direction you want it to is critical for the future survival of your business.

Technology

For those of us who love to play with new toys, technology is a joy. For many of you, it is the bane of your existence. I continue to be amazed by how many businesses are still keeping their head in the sand about using the most basic technological aids. You don't have to wire your own computer network, but learning what is available to support your business technologically can save you huge sums in labor.

Crisis Management

Interestingly, this is an area I get a lot of mail about. I don't know if it is because there are many new businesses having crises - I know that I had my fair share - or whether the internet is a place many look when they have a crisis. It certainly is wise to be prepared.

This list is nowhere near being comprehensive - and there are always new ideas surfacing every day.

One fruitful approach is to find a support group of other entrepreneurs who you can get together with on a regular basis. Depending upon the group, you can share learning experiences or sponsor educational programs which all of you can learn from. Not only does this keep you focused on continually learning, but it gives you contacts in the business community who can aid you in your business development. Learning is an integral part of being an entrepreneur. In a sense it is the essence of what entrepreneurship is about - continually learning and applying that knowledge to the changes that are occurring.