As an entrepreneur, you need to tap into other people’s core competencies and develop your own as well if you want to run a profitable business.
Many small business owners make the mistake of trying to figure everything out for themselves. Others depend too much on other people when making business decisions. The best way to run a business is to rely on other people who have more expertise and to trust your judgment when a business issue is within your area of core competencies.
Here is an overview of how to strike the right balance to flourish in your own business.
When to Rely on Other People’s Advice
The biggest mistake a business person can make is to fail to take into account their own ignorance. The primary cause of business failure is thinking you know more than you do.
While it is possible to educate yourself on many things, there are some fields of knowledge that are so specialized it is unrealistic for you to already know them in-depth. For example, you need to know about law and accounting, but it’s impractical to go back to school to get a degree in those fields.
Handling Legal Issues
When you read about how the Department of Justice is suing Google for violating antitrust laws, it’s easy to assume that legal issues only arise when you’re running a large company. After all, as a small businessperson, no one is going to come after you for monopolistic business practices, right? While you don’t need a battery of lawyers to defend your company and no one expects you to be a legal expert, there are at least three areas you need to become familiar with. The first is vicarious liability; the second, overtime regulations; and the third, trademarks, patents, copyrights.
Since it’s unreasonable to expect you to understand many aspects of the law when it comes to the many issues that crop up when owning your own business, Canyon Legal Group advises that you should rely on legal advice from firms that specialize in helping small businesses with their legal challenges.
Managing Accounting Problems
Sophisticated accounting software makes it easier for you to take care of your own finances most of the time when you are running a small business.
However, you will still need to outsource work to an accountant when you first start your business, when your budget is getting out of control, and when you have complex tax issues.
When to Practice Self Reliance
You need a core set of knowledge, skills, and experience to run your business. There are many hard and soft skills that you need to bring to your new business or develop as you grow your business. Here are five critical things that you need to know:
- You need to know how to develop empowering relationships within your own company and with other business people.
- You need to know how to create a viable business plan.
- You need to know how to secure working capital.
- You need to know how to manage a company
- You need to know how to market and sell your products and services.
You don’t have to be an expert in any of these things, but you need to know enough to be effective. If you are lacking in any of these skills, then you should learn them.
When to Create a Partnership
If you find it difficult to acquire these core skills, then you must partner with someone who already has them. Let’s say that you find it easy to administer a company because you have a knack for learning how to manage people and organize things, but you struggle with getting good at marketing and sales. In this case, you should partner with someone who fills in the gaps. Sometimes, too, your skills can be accentuated when you work with the right person.
One of the most famous examples of a successful business partnership is that of Warren Buffett and Charlie Munger. Both men would probably have done well on their own, but working together, they enhanced each other’s considerable abilities. While Warren Buffett is famous for his investing acumen and business skills, he would not have been as successful in business if he had not partnered with Charlie Munger, a lawyer with a highly analytical mind, who has developed a reputation as one of the smartest people in business.
To sum up, your success in business depends on striking the right balance when it comes to getting professional advice, relying on your own knowledge and skills, and creating a partnership.