6 Crucial Key Competencies Every Entrepreneur Needs to Master Now

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6 Crucial Key Competencies Every Entrepreneur Needs to Master Now

If you haven’t mastered every single one of these 6 crucial skills, you may be compromising your startup’s future and success.

6 Crucial Key Competencies Every Entrepreneur Needs to Master Now
Photo by Luis Villasmil on Unsplash

There’s one tell-tale sign of a sure-to-fail entrepreneur: They fall victim to a tempting desire that teases us all. If you haven’t caught on yet, I’m referring to the desire to delay or avoid that seemingly difficult task that’s intimidating you into taking a short-cut or procrastinating altogether. Being afraid of “hard things” is the #1 way to sabotage your entrepreneurial success. Why? Because successful entrepreneurship is built upon brave, brazen founders who trudge forth in the face of hardship and embrace the challenge of expanding their skillset and toolkit.

Being a smart entrepreneur also means being self-aware enough to determine which tasks are worth your time and which are better outsourced. That said, there are 6 crucial competencies that, whether or not you ultimately choose to outsource to experts, you need to learn and ideally master in order to effectively build and grow your current and future business(es).

Over the past ten years, I’ve hired my fair share of developers, from custom coding computer science whizzes to WordPress designers to no-code experts. I’ve paid them anywhere from a few hundred bucks to 6+ figures, depending on the project, platform or tech stack, and the team’s background, credentials, and expertise. Nonetheless, it wasn’t until about 3 or 4 years into my entrepreneurial journey that I realized the grave dangers of relying solely on outsourced developers to replace my comparative incompetence.

At a bare minimum, if you’re an entrepreneur building any type of product or business you might sell online or for which you’d want an online presence (that should be everyone), there’s really no excuse for lacking the skills to build a website or landing page yourself. Sure, you can hire someone off UpWork and it won’t break the bank, but if you’re hiring them because you believe there’s some magical, mystical secret to building these things that’s too complex or confusing for you to understand, you’re doing yourself a huge disservice.

I believe any and all entrepreneurs should know the basics of how to:

  • Get a domain
  • Build a website and/or landing page (using a drag-and-drop builder is fine, but you need to feel comfortable doing this yourself, connecting your domain, setting it live, and making changes)

If you don’t feel comfortable with the above, set aside 30 minutes or so and watch some free YouTube tutorials to empower yourself with the knowledge and confidence to build them yourself. Plus, at the very least you’ll tack on another monetizable skill set into your warehouse that you could even parlay into a full-time business or side gig in under an hour. What’s the downside of augmented skills, confidence, and an additional potential revenue stream to bolster the early, non-revenue-generating times or lulls in your business?

If your idea of selling a product is running a purchase conversion ad or simply flooding social media with testimonials and a link to the checkout page, you may be missing the most vital skill to business success (or one of them): sales funnels.

Sales funnels are arguably so important that countless marketing agencies and consultants would happily charge you thousands — I’ve been quoted $10k+ — just to set one up. With rates that high, you’d think there’s got to be a ton of technical mumbo jumbo to wade through and years of expertise required to build one effectively. That’s why they charge the steep prices, right? Not exactly. In contrast, I’d argue that perception of sales funnels as technical and complex is why these marketers can justify charging those prices for implementation and why desperate entrepreneurs are willing to pay them.

While there may always be someone with a more sophisticated sales funnel or claiming to use novel or bespoke strategies their team has kept under lock and key, that’s probably more hype than reality. At its baseline, a sales funnel is the predetermined and often automated journey you take prospective customers through to attempt to nurture them into making a purchase.

If you’re an entrepreneur who hasn’t mastered sales funnel implementation, it’s time to start now — before putting the fate of your sales in the hands of an outsourced marketing team who cares more about their upfront fee than your backend conversion. This knowledge can also help you avoid getting scammed in a notoriously sketchy industry in which fly-by-night agencies infamously take advantage of less-savvy entrepreneurs. Trust me — even I’ve been a victim (to the tune of a $30k+ loss), and you don’t want to be next.

How to create a sales funnel? Here are the basics:

  • A lead generation tool (this could be a landing page to an email sequence, a free trial in exchange for a phone consultation, access to an exclusive offer in exchange for hopping onto a text thread, etc.)
  • The nurturing middle (this is where you build rapport, overcome the know, like, and trust factors, provide some value, and lead your prospect from their initial interaction with your business towards becoming a fan)
  • The sales conversion or upsell (this is where you finally actually ask for or incentivize the sale)
  • Optional alternate product or downsell (this is where you direct prospects who aren’t interested in or capable of purchasing the main product, but who may still be interested in other or relevant offerings)

If you get comfortable with just a few free or low-cost sales funnel automation tools (like landing page builders, email sequences, chatbot message builders, checkout pages, etc.), you can truly market and sell hundreds — well, really an infinite number — of products or services.

One of the hardest parts of entrepreneurship doesn’t occur when building or growing a company; it actually occurs far earlier. I’m referring to the decision-making process around creating, introducing, or acquiring a new business, product, service, or opportunity.

Though some people might argue that with the proper marketing or the right audience access, any business can succeed, I tend to disagree; I do believe there’s such a thing as sure-to-fail (or likely-to-fail) startups and ideas, and it’s crucial that astute entrepreneurs weed them out early on. Thus, the skill here is how to dissect new business opportunities fully and identify their potential flaws, obstacles, limitations, and vulnerabilities.

The ways to do this range from considering lead generation and traffic sources to brainstorming monetization options to disaster-proofing with diversification in case anything goes wrong or changes. If you want more tips on this, you can find them here, where I discussed things to consider before buying a business or website.

As you traverse the rocky road of entrepreneurship, there will likely be some very difficult decision to be made. To name a few:

However, there’s one decision that remains among the hardest I’ve ever had to face, and it may be among the most conflicting for you as well. That decision: When and how to cut your losses.

I’ll be the first to admit there were years when I persevered against all odds and to be honest, I shouldn’t have. There were products, services, partners, and ventures for which all signs were pointing to an increasingly uphill battle, but I didn’t want to listen to them. As much as ambition, grit, and perseverance are great traits for founders, it’s equally important to be able to take an objective step back and re-asses if, when, or how it’s time to cut your losses or course-correct with a new product, service, target market, strategy, or business altogether. I could have saved myself 2 years of heartache and 6-figures in sunk cost had I realized this sooner.

Here are a few considerations to make this decision a bit easier:

  • Are the obstacles you’re currently facing going to get better or worse?
  • Is the market telling you something you refuse to listen to or believe?
  • Is an insurmountable external factor or trend foreshadowing a negative long-term trajectory for your business or industry?

Deciding to cut your losses, kill your “baby”, or pivot to a new direction or pursuit shouldn’t be based upon how much time, money, or effort you’ve already put into the project; those are retroactive data points. Instead, it should be based upon the forward-looking factors that impact the future and opportunities ahead. Once you stop living in the past and pining over sunk costs or wasted time, you’ll be able to step into the future and build a business that won’t feel like pulling teeth — either yours or your customers’.

There’s one area in which the entertainment industry undoubtedly succeeds, while the entrepreneurship and marketing industries miserably fail; it all comes down to a simple rule: Don’t be boring.

Think about the last ad or sponsored social media post you saw. How about the last five? Do you even remember them? I’m guessing that’s a no — and that’s a problem. No matter what you’re selling, if you’re hoping to cut through the noise and competition and capture either a prospective customer’s or potential investor’s attention, you need to be intriguing, gripping, and captivating enough to actually get them hooked. If you can successfully get people hooked, keep them engaged, and convert them into being your or your company’s biggest fans, you’re going to reap some serious rewards.

Thus, this crucial skill is to confidently package and pitch your or your startup’s talking points, strengths, and credentials without boring people. It’s harder than it sounds, but dissecting a few dozen great marketing hooks and perusing a few screenwriting-related frameworks might offer helpful clues.

While the above skills may take a bit of time, observation, and practice to master, this one is at every entrepreneur’s fingertips and there’s no excuse for shirking it. I’m talking about the ability to objectively measure and manage uncertainty, risk, and runway with meaningful statistics or key performance indicators. While KPIs may vary a bit from industry to industry, there are some calculations that transcend pretty much all businesses, and you should know them:

CAC:

Customer acquisition cost is the cost — in marketing dollars — to acquire another customer. You can calculate this by taking your marketing spend and dividing it by the number of customers acquired (number of sales from individual customers), though you may want to adjust for any one-time or external factors that may impact this number from time to time.

Let’s say Kim Kar-you-know-who tweets about your product for free and you sales goes through the roof; that’s going to drive down your CAC to unrealistically low levels for a while. Noted.

CLTV:

Customer lifetime value is a measure of how much money you expect a customer to spend on your business over the duration from which they purchase from you. This can be calculated by assessing the average amount customers spend on a typical purchase, the frequency of those purchases, and the total duration throughout which they repurchase.

For example, let’s say you sell running socks, and the average customer buys two pair at a time for $30 total. If most customers repurchase every three months, that would be four purchases in a year, so the CLTV (in a year) would be $120. That’s a pretty important figure to know, since you want to ensure your CLTV is greater than your CAC or else you’re likely to remain unprofitable.

Runway:

This is simply a measure of how far the money in your business’s bank account can take you, given your recent historical rate of spending. For example, let’s say my business spends $5k per month (our burn rate), and we have $50k in the bank. That implies we have enough cash to ride out about 10 months of no profits (nothing to increase our cash position).

Obviously, the goal is to continue to grow profits and increase that cash position, but we want to have a handle on the worst case scenario so we don’t run out of funds because we ignored a simple math problem.

Conversion rate:

Plainly put, this is the rate at which your marketing converts strangers into leads or leads into customers. This is an important statistic, as it enables you to compare and contrast different marketing channels against one another to decide which to prioritize, which to scale back, and which to change or tweak.

You can calculate the conversion rate by taking the number of conversions (clicks, emails entered, purchases, etc.) divided by the total number of people reached. If your ad was viewed by 100 people and 5 took the requested action, that would be a 5% conversion rate.

Go to Publisher:

Entrepreneur's Handbook – Medium


Author: Rachel Greenberg