Business Skills You Need To Master

Running a business demands more than passion. Many entrepreneurs fail because they were unable to translate their passions into practical business skills.

These business skills you need to master can be learned over a period of time or entrepreneurs can hire employees/professionals who are strong in specific areas.

Here are some business skills you need to master to help make your business succeed:

Analytical Business Skills:

This is the ability to collect and analyze information and make decisions. For entrepreneurs, this decision could be whether to obtain a loan to fund the business or not. Good analytical skills can help solve a company’s problems and improve its overall productivity and success.

Communication Skills:

The ability to convey or share ideas or feelings effectively. Skills include empathizing, listening, observing, and speaking. Communication skills help you to understand the differences in how to communicate through face-to-face interactions, phone conversations, and digital communications.

Delegation Skills:

This allows you to get results, manage time, develop people, and build morale. These skills help to instill confidence in your team and also help staff to be more engaged.

Leadership Business Skill:

These are abilities individuals demonstrate that help to oversee processes, guide initiatives, and steer their employees toward the achievement of goals.

Negotiation Skills:

The abilities and qualities that allow two or more parties to reach an agreement. Your ability to persuade, communicate, plan, and strategize are key soft skills for negotiation.

Team building Skills:

These skills help a team to solve problems in a way that helps them achieve their goals and keeps team members working well together. Teambuilding activities help team members to develop their strengths and address any weaknesses.

PS: In any team-building exercise, collaboration should be encouraged and not competition.

Time management Skills:

If you’re not managing your time well, there’s no way you’re going to reach your goals. These skills help you to plan and control how much time you spend on specific activities and reduce stress and improve productivity.

Strategic Planning:

This is the art of formulating business strategies, implementing them, and evaluating their impact based on organizational objectives. The purpose is to set overall goals for your business and to develop a plan to achieve them.


Cash flow During Difficult Business Cycle

The cliché Cash is King has never been so apt as now, the Corona Virus Pandemic has distorted revenue pipelines and starved business of cash to execute projects, almost tending to bankruptcy for some.

Business owners understand that cash is the lifeblood of an enterprise routine operational activities such as purchasing supplies, paying salaries, and paying bills depend on its availability

Cash flow refers to the total amount of money that is generated and expended by a business and determines the liquidity of the organization.

For small and medium businesses, the ability to generate sufficient cash and manage liquidity will be a deciding factor in whether it survives the shock and aftershock of the difficult economic cycle caused by the pandemic.

During economic downturns, cash flow generation might be limited due to the drop in sales or revenue, disruption in supply-chain, large inventories tying down cash, and growing receivables. More precarious is the fact that banks and other lenders become more cautious in the grant of credit to business at such times to ensure the preservation of the depositor’s funds from high-risk ventures.

Small and Medium Scale businesses taking the foregoing into consideration must implement certain strategic cash management measures to keep them afloat during this period.

Identify the Income generation and expenditure points

Sources of cash are those activities that are cash-generating and the use of cash is the ones that reduce the money in the business. For E.g.  Credit from Customers is a source of cash generation while an example of a use of cash is the purchase of a van for the business.

Understanding how cash comes into and leaves your business will help you decide how to restructure activities to keep liquidity robust enough to support operations. In the instance above, the firm owner can decide to delay the purchase of the van and leverage credit from suppliers to generate the cash it needs or conserve its cash buffers.

Carry out a risk assessment to business cash flow

After mapping out cash inflow and outflow in the day-to-day running of the business, owners and managers need to understand the various types of risk to their cash flow that they face. The risk to the liquidity position of a business can emanate from shocks to revenue, high-cost structures, “too early” settlement of obligations, and debtors that are slow in clearing out their liability to the business.

These challenges must be ranked in a way that reflects their probabilities and likely impact on the firm. By doing this, the business has an airtight framework to help in designing a strategy that will limit their risk of going-under due to insufficient funds.

When it is the case that slow sales are stifling cash inflow, the business can seek out other revenue streams to keep money coming in. Businesses into perfume production that shifted to the production of sanitizers is a clear instance of how practical and helpful this step is.

Next, if it is a problem of the cost burden, then those businesses can work to delay the settlement of those obligations and digitize some of their processes to reduce their expenses.

On the other hand, there is no one way to deal with the problem of receivables that have been delayed. The business owner can try to negotiate incentives like a discount to encourage debtors to pay early.

Keep an eye on your Cash Conversion Cycle (CCC)

Cash Conversion Cycle (CCC) is the number of days it takes for a business to convert its investments in inventory into cash. Investopedia defines it as how fast a company can convert cash on hand into more cash on hand.

CCC is the sum of the days it takes to sell your inventories (Inventory Days on Hand) and get back receivables (Days of Sales Outstanding) minus the days it takes to settle Payables (Days of Payables Outstanding).

Keeping accounting technicalities out, the logic is that if it takes lesser days to sell inventories and get back money owed to the business while it takes the firm more days to pay suppliers, the shorter their CCC would be – which is a good thing since they can put that cash back to use.

Secure supply chain

A major cash flow risk to businesses is the disruption to their supply chain which affects revenue-generation or leads to a spike in cost if the firms must replace suppliers at unfavorable terms.

Businesses need to secure their input supply by ensuring that if their suppliers are in distress already, they have mapped out alternatives to ensure their own operation is not jeopardized.

Factoring Government intervention

Businesses can also explore other financing options to inject more cash into their operations. We have several options like government grants or relief funds are often under-explored by businesses and another option is for businesses to factor in their account receivables.