Why Running a Business is Difficult PT 1

Photo by SIMON LEE on Unsplash

Introduction

People usually point to entrepreneurship as an alternative to a 9 to 5 job. I have tried my hands at entrepreneurship and I have so much respect for anyone who is successfully running a legal business especially those running a one person business.

My goal with this post is to note down some things that make entrepreneurship difficult and what can be done to overcome the challenges.

Reason 1 — Skills Gap

Let’s start this section with a quote from a book called The Peter Principle by Lawrence J Peter and Raymond Hull

“Dr Peter observed that one reason so many employees are incompetent is that the skills required to get a job often have nothing to do with what is required to do the job itself”. For example, “The skills required to run a great political campaign have little to do with the skills required to govern. There is nothing about being a great surgeon that prepares a doctor to run a hospital. Learning how to be a great litigator in no way prepares a lawyer to run a law firm. Many organisations, from hospitals to law firms, use such standards to select new leaders — yet devote little or no attention to their management skills. They often end up with lousy leaders and lose their best individual performers.”

I think the same is true for business, having expertise in an area or having a great solution to a real problem doesn’t guarantee that you have the l skills needed to turn it into a successful business . You may be a good account but lack the skills needed to acquire new and quality clients so your dream of starting an accounting firm may not be a reality. Another person may know how to attract new customers, but not know how to nurture customer loyalty so they aren’t able to get the repeat sales they need to keep a business running. You may have a great solution but lack what it takes to raise funds and hire the right team.

There are some key skills that you need to run a business, if you lack those skills passion and drive may not be enough to get you to success.

Skills Needed to Run a successful business

According to a video from Leila Hormozi some key skills needed to successfully run a business are

Skills needed to increase revenue from 0 to 1 million usd

1. Sales
2. Marketing
3. Offer development ( price + features)

Skills needed to increase revenue from 1 million usd to 10 million usd

1. Learning how to increase customer life time value and get recurring revenue
2. Learning how to hire right

Skills needed to increase revenue from 10 million usd to 50 million usd

1. Setting up systems that are data driven
2. Hiring functional leaders