Many people believe that having a great idea is the most important prerequisite to being an entrepreneur—and they couldn’t be more wrong. That’s because an entrepreneur is a businessperson, and you don’t have to be innovative to run a thriving business (although it certainly helps). Otherwise, we wouldn’t consider independent franchise owners as entrepreneurs, would we?
The truth is, being an entrepreneur requires just two things: the right mindset and the right skillset. The good news about that is that anyone can acquire them.
But to do it, you’d first need to know what makes for the best entrepreneurial mindset and skillset. And it turns out that there are some excellent answers to those questions. Read on to learn what it takes to be an entrepreneur.
The Key Elements of the Entrepreneurial Mindset
Some people will tell you that the entrepreneurial mindset isn’t something you can learn. They believe that you either have it or you don’t—and if you don’t, you’d best line up behind someone who does.
The people who believe that have either never tried to do it or have given up on themselves before they had a chance to succeed.
If you want to mold your mindset into that of an entrepreneur, you have to begin by believing in yourself. And then, you’ve got to commit to incorporating the following elements into your way of thinking.
Here are five key elements of the entrepreneurial mindset:
1. A High Level of Resilience
The most important part of the entrepreneurial mindset is resilience. That’s because failure is an ever-present risk for entrepreneurs.
Some of the most successful entrepreneurs in history weathered countless failures before finding success. And chances are, you’ll endure some setbacks, too.
What matters is your ability to get back up and try again. As long as you believe in yourself and make an effort to learn from any failures you experience, you’ll eventually come out on top.
As Winston Churchill aptly puts it:
“Success consists of going from failure to failure without loss of enthusiasm.”
If you can do that, you’re already well-suited to being an entrepreneur.
2. Boundless Curiosity and the Desire to Learn
One of the things that most first-time entrepreneurs are struck by is the realization that there’s an awful lot they don’t know. And there are two ways they can respond to that realization.
They can put on a facade and try to bluff their way through the things they don’t know. Or they can acknowledge their deficiency, and find someone who knows better and learn from them.
I’d bet you can guess which one is the correct approach.
Successful entrepreneurs are almost invariably curious people. They don’t fear what they don’t understand. They want to learn as much about the tasks in front of them as possible, and they view new knowledge as its own reward.
So, if you wish to be a successful entrepreneur, it’s very important to develop your own curiosity and make constant learning a part of your mindset.
3. An Internal Locus of Control
For entrepreneurs, success isn’t an accident. It’s the result of careful planning and deliberate action. But if you’re the type of person that believes that the world is in control of your life, you have what’s called an external locus of control.
People who think like that believe that providence and luck have more to do with success or failure than their actions, and that’s a counterproductive mindset for an entrepreneur. After all, if the outcome will be the same no matter what you do, why try anything at all?
Successful entrepreneurs believe they can shape the events that unfold around them. They have what’s called an internal locus of control. That means they don’t make excuses.
Successful entrepreneurs don’t blame external factors when things don’t go their way. They examine negative outcomes and work to see that they’re not repeated, and that’s what you must learn to do if you’d like to be one of them.
Although it should be obvious, having the ability to self-motivate is a key part of the entrepreneurial mindset. The reason is simple: if you’re starting a business, there won’t be anyone else around you to drive you forward. That means all your motivation must come from within.
But not all kinds of motivation are created equal. Entrepreneurs that start businesses because they’re dreaming of a financial windfall rely on what’s called extrinsic motivation.
While there’s nothing wrong with wanting the trappings of success, extrinsic motivation is somewhat self-limiting for entrepreneurs. That’s because not every correct business decision is about the bottom line.
For example, a business that takes a chance on a daring new product is risking everything in the hope that its market assumptions will prove correct. That’s something that an entrepreneur that relies on extrinsic motivation would likely never do—because they’d be too risk-averse to consider it.
But there’s another type of motivation that would drive an entrepreneur to take that risk: intrinsic motivation.
Intrinsically motivated entrepreneurs seek satisfaction from striving to reach their goals. They’re not motivated by external factors like rewards and punishment, and that means they’ll often take chances that other entrepreneurs wouldn’t.
It was his intrinsic motivation that led Steve Jobs to gamble Apple’s very survival on the iPod back in 2001—and it paid off spectacularly. It turned Apple into the world’s first $3 trillion company, and it was the exact kind of decision that an entrepreneur with intrinsic motivation would make. Not a bad trait to emulate, is it?
5. A Willingness to Experiment
Last but not least, successful entrepreneurs tend to have a willingness to experiment that goes well beyond that of the average person.
Ordinarily, people believe themselves quite comfortable with the idea of experimentation. But more often than not, the types of experiments that they’re open to fall into a very specific category: things with predictable outcomes.
For example, they might be more than willing to try exotic food. But that’s only because they expect only one of two outcomes: they’ll either like it or they won’t.
An entrepreneur doesn’t mind experiments with unpredictable outcomes. They have an innate ability to leave their expectations at the door and follow the results of an experiment wherever they lead. They possess a kind of open-mindedness that others do not.
It’s why successful entrepreneurs frequently end up spearheading the development of products that other established companies passed on. It’s a part of the entrepreneur’s mindset that you can adopt if you’re willing to work at it.
The Skillset of a Successful Entrepreneur
Once you’ve mastered the mindset of an entrepreneur, you’re only halfway to being ready to start a business. There are also some very specific skills you’ll need if you want to guide a startup to profitability.
Much like the entrepreneur’s mindset, all of the skills you need are ones you can develop with enough time and effort. You don’t even need to become an expert at most of them. Instead, think of the entrepreneur’s basic skill set as a group of core competencies.
What you need is some basic knowledge of a handful of subjects and the ability to carry out some business-related tasks on your own. The rest of what you’ll need can be learned as you go. After all, if your business takes off you won’t be running it alone for long, will you?
Here are four key skills of a successful entrepreneur:
1. Basic Financial and Accounting Skills
While most people believe that the key to startup success is to have a killer product that people want, in reality, there’s something even more important. It’s for the entrepreneur behind the business to have a solid grasp of accounting so they can stay on top of their startup’s cash flow.
To understand why, you must do a little bit of digging into the data around startup failure. You can begin with the fairly common knowledge that 90% of startups won’t survive to see their tenth year of operation. But what’s important about that statistic is why so many startups fail. The truth is that 38% of them fail because they run out of money.
You’d be shocked at how many of those failures happened because the business’s founder either mismanaged the company’s cash flow—or, more commonly—relied on flawed cash flow projections that failed to come true.
So, if you want to be a successful entrepreneur, you’re going to need to build some solid financial management skills. At a minimum, you’re going to want to learn how to keep a set of books, prepare financial statements, and manage business cash flow. Only then will you have the skills needed to avoid the money trap that destroys so many startups.
2. Solid Networking Skills
As much as everyone would like to believe that business success is a matter of out-competing the other guy, that’s not always the case. The old saying that “it’s not what you know, but who you know” isn’t very far from the truth.
Sometimes, a less-efficient, less innovative business will win the day because they have the connections needed to dominate a given market. And that means that having a solid set of networking skills is an absolute must for an entrepreneur.
It’s yet another skill that anyone can master if they dedicate themselves to the task. And you don’t have to be particularly sociable to be a great networker, either. All you need to do is to learn the right strategies to build yourself a useful contact network and execute your strategy without letting your efforts fall by the wayside.
3. Data Analysis Skills
These days, no business will get very far if it doesn’t make use of data to inform its strategy. As the principal decision-maker of a startup, it’s on the entrepreneur to understand what to do with data. And it’s also helpful for them to be familiar with common data analysis tools and visualization platforms.
Fortunately, data analysis is big business these days. So, there’s no shortage of online training programs that can turn just about anyone into a data analysis master with some targeted studies. Many of them are aimed at would-be entrepreneurs, too.
Such courses tend to focus on specific data skills that help entrepreneurs learn to look for patterns and understand trends—both of which are the bread and butter of successful early-stage business decision-making.
The bottom line is simple: if you master enough data skills to know how to perform basic data cleaning and simple forms of predictive analysis (like sales forecasts and customer segment analysis), you’ll be in good shape as you launch a new business. At the very least, you’ll be head and shoulders above any entrepreneur that relies on instincts alone.
4. Communication Skills
In the world of startups, entrepreneurs tend to learn one thing early on—it’s that great ideas and solid business plans mean nothing if you can’t persuade others of their value. And that’s why every entrepreneur must develop strong communication skills before jumping into a new venture.
Communication skills will factor into every single major stage of a business. They’re essential in the pitch and capital-raising phase. They’re the key to landing your first handful of customers, and they’re critical as you begin to hire a staff and start delegating important tasks.
With some practice, anyone can be a great communicator. It’s not as hard as you may assume it to be, especially if you follow some basic and effective communication techniques. In no time, you’ll master being receptive to others and being transparent about what you think—and those around you will notice and appreciate it.
Of course, it’s important to realize that even the world’s best entrepreneurs don’t always succeed. But if you adopt the correct mindset and approach your startup with the proper skills, your odds of success will improve dramatically.
More importantly, you’ll have what it takes to thrive in a competitive environment and to bounce back when things don’t go your way. And as an entrepreneur, you’ll soon learn that those traits are invaluable as you work your way toward success.
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Featured photo credit: Jenny Ueberber via unsplash.com