Starting a Business: Essential Skills & Planning

Posted on Feb 14, 2025 in Business Administration and Management (BAM)

What Is a Startup?

A startup is a company in the first stage of its operations. These companies are often initially bankrolled by their entrepreneurial founders as they attempt to capitalize on developing a product or service for which they believe there is demand.

What Is an Entrepreneur?

An entrepreneur has the capacity and willingness to develop, organize, and manage a business venture along with any of its risks in order to make a profit. Entrepreneurial spirit is characterized by innovation and risk-taking. It is an essential part of a nation’s ability to succeed in an ever-changing and increasingly competitive global marketplace. The most obvious example of entrepreneurship is the starting of new businesses. It is based on three fundamental elements:

  • The business opportunity
  • The entrepreneur team
  • The resources

These elements interact in the following process:

  1. Generation of ideas
  2. Definition of business opportunity
  3. Preparation of a business plan
  4. Creation of the company
  5. Management and consolidation of it

Social Skills

Teamwork, attitudes towards cooperation, communication ability, ability to relate to the environment, sensitivity to the needs of others, and the ability to expose and defend one’s ideas before others are crucial. As a successful entrepreneur, you’ll have to work closely with people – this is where it is critical to be able to build great relationships with your team, customers, suppliers, shareholders, investors, and more. Some people are more gifted in this area than others, but, fortunately, you can learn and improve these skills.

Management Skills

Planning, decision-making, assumption of responsibilities, ability to face problems and solutions, persuasive ability, leadership, and capacity for the organization and optimization of resources are essential. A successful entrepreneur must be able to make wise decisions about how they use their time, continually evaluating and prioritizing tasks according to relevance and importance. This type of time management includes short- and long-range planning and the ability to participate in economic forecasting and market research. Entrepreneurs must also manage their professional life in conjunction with their family life.

Personal Skills

Courage, resilience, focus, confidence, creative thinking, and realism are important personal skills.

Entrepreneurial Skills

  1. Networking
  2. Learning on the go
  3. Presenting and pitching
  4. Self-reliance and discipline
  5. Time management
  6. Adaptability
  7. Failure Management

Sometimes when the going gets tough, all an entrepreneur can do is simply wing it.

Mistakes New Entrepreneurs Should Avoid

  1. Not Knowing Your Industry
  2. Launching a Second Business too Early
  3. Making Poor Hiring Decisions
  4. Spending too Much
  5. Doing too Much at Once
  6. Losing Focus of Business Development
  7. Not Growing Organically
  8. Building Before You Sell Things
  9. Getting Distracted By Irrelevant Information
  10. Not Converting Knowledge Into Action
  11. Not Focusing On Your Monetization Loop First
  12. Not Delegating Or Investing In People
  13. Assuming Tomorrow Will Be Like Today

Identification of Business Opportunity

The world is worried in case…You provide value (value proposition), to me, to us (customer segment), from a source that I can trust (customer relationship), and at a price that makes sense (revenue). A solid value proposition is the #1 thing that determines whether people will bother spending more time talking about your startup.

Entrepreneur Communication

Your success in life, and as an entrepreneur, depends largely on your ability to communicate. You need to be able to clearly communicate with employees, investors, partners, and even yourself. Here are three essential communication skills every entrepreneur should master:

  • Listen, Listen, and Keep Listening
  • Keep it concise
  • Pay attention to non-verbal cues

The ability to effectively communicate is a skill that will pay dividends forever.

Elevator Pitch

An elevator speech is a short, clear message that communicates what you are selling, why you are better than the rest, and how you can benefit an organization, an industry, or the world! You just have 30 seconds – 10 minutes, so you need to go straight to the point. Use simple and direct language, speak slowly to make sure everybody will understand it and no one will be lost.

  1. Objective: What do you want to achieve?
  2. Product/Service: What are you selling?
  3. Problems: What problems do you solve?
  4. USP: What makes you stand out?
  5. Testimonials: What do your customers say?
  6. Motivation: What makes you get up in the morning and do what you do?
  7. Handout, next steps, call to action.

Look for an Idea

Finding the correct idea is the first thing you have to take into account before starting a new business; it can be determinant for the success or failure of the company. Even the simplest business, in appearance, can end before starting because of an ill-defined or underdeveloped idea. The idea must be realistic and be presented as viable. It is not about finding a business that revolutionizes the market, but it is about detecting a gap, an opportunity that nobody has taken advantage of. Find your own Blue Ocean.

Where Do Ideas Come From?

  • Observation as a source of ideas
  • Perceived absences
  • New uses for current things
  • Processes: poorly completed, improbable, different
  • Previous professional experience
  • Hobbies
  • Unmet needs

How to Know That an Idea Can Be a Business That Thrives

  • Detect which segment of customers it is possible to address within the universe of users, analyzing what needs are covered and what satisfaction can be provided to future users.
  • Cover an unexploited market niche.
  • Conceive it within a known sector.
  • Analyze the competition and the market.

Financial Planning

Establishes the framework to achieve the company’s financial goals. They are different among firms but they follow some common factors:

  • Time horizon:
    • Medium/long term Strategic Planning: 3-5 years
    • Short term: Budgetary planning
  • Macroeconomic assumptions: Forecasting macro magnitudes such as GDP (gross domestic product), interest rates, inflation rates
  • Sales forecast: Key variable to set up financial planning
  • Financial statements: Forecast to the P&L, investment, funds needed and cash flow statement when possible.

Budgetary Planning

Quantitative expression of financial situation, real vs forecast, drawn up in advance, and aligned with the corporate goals. Is a method to encourage managers to think ahead and is used to link manager’s goals with corporate ones.

  • Sets financial goals in line with corporate ones.
  • Allows managers to expend authorized amounts (budgeted figures).
  • Provides managers with a financial tool to monitor sales, expenses and other figures.
  • Helps accountants to plan long term financials.
  • Is usually a year and can divided in quarters or even months for deviation purposes.

All departments have to send their proposals to financial department who consolidate the information:

  • Coordination: will lay into Budgeting and control department, part of Finance.
  • Profit goals will be set up by the shareholders.
  • Operative goals will be set up by area managers and supervised by management team (CEO, BOD): Calendar, TBD upfront. Each department will submit the information on time.