11 Must-Have Skills Required for Business Management

1. Financial management

Entrepreneurs are a lot of things: Driven, creative, hard-working, and more. But they’re not always financial professionals. It’s no secret that financial management is the key to business success and if you’re managing a company, it’s required. Even if you work with a bookkeeper or an accountant, you should know these terms:

Gross Revenue

Gross revenue is the total amount of sales for a reporting period, prior to any deductions.

Expenses

According to the SBA, business expenses are the cost of conducting a trade or business. These expenses are usually tax deductible if your business is for-profit. Rent, business travel and paying employees are all deductible business expenses. Our blog post covers how to set up a system to track: How to Keep Track of Business Expenses.

Net Profit

Net profit is the profit of a company after operating expenses and all other charges including taxes, interest and depreciation have been deducted from total revenue. A company’s operating profit margin measures the proportion of income to revenue. Learn more here: What is a Good Profit Margin for a Small Business.

Cash Flow

Cash flow is the money moving (flowing) in and out of your business monthly. 82% percent of businesses fail due to poor cash flow management skills/poor understanding of cash flow. Here’s an article from SmartBiz University that can help: Analyzing Cash Flow | SmartBiz University.

Balance Sheet

A balance sheet is a snapshot of the financial condition of a business at a specific moment in time, usually at the close of an accounting period. Learn how to create a balance sheet on the SmartBiz Blog.

Cash Flow Statement

The cash flow statement measures how a business generates cash to pay its debts and fund operating expenses. The article How to Calculate Small Business Cash Flow will help you get started.

Revenue Forecast

A revenue forecast is a prediction for the upcoming year about how much money your business will likely bring in from the sale of your goods or services.

Want a deeper dive into financial terminology important for a small business? Check out our Glossary of Financial Terms for Small Business Owners.

To learn the financial habits you need to practice, review our article: 6 Financial Habits of Successful Small Business Owners.

2. Customer service

According to a Microsoft report, 54% of all consumers globally say that they have higher customer service expectations than they did just one year ago. It’s safe to say that providing the best customer service experience possible should be a top priority for every business, be it a billion-dollar corporation or a single employee mom and pop shop.

Check out our blog post packed with reasons why customer service should be top of mind: 9 Reasons Why Customer Service Is So Important. Training your team well is a component of great customer support. Our article has guidelines you can follow to shape an effective customer service policy: Keys to Great Customer Service – Even if You’re a One Man Organization.

3. Communication

Open and honest communication is a must in a business setting. Communication style comes from the top so work to develop your skills. Here are ways you can show that communication is important for your organization.

Foster a positive atmosphere

Do you have a nice coffee machine? Do you bring in snacks or meals occasionally to celebrate a successful week? Let your employees know how important they are to the overall business.

Be open

Nothing can break down communication like keeping information from your employees. Make sure to update your team about issues that impact your business – both positive and negative. The more knowledge you give to your employees, the more likely they are to build on successes and find solutions for problems.

Respond promptly

Listen and act on issues brought to your attention. Ignoring email or an in person request to meet can affect the positive atmosphere you’ve built.

4. Leadership

Without effective leadership, it’s nearly impossible to grow a business. Here are a few reasons good leadership is so important in a small business setting:

Shape direction

A business leader will be able to show employees where the business is headed. Many employees are self-starters and can do their job without much guidance. That may not be true for all of your employees and a great leader is often needed to provide motivation and direction.

Establish the company culture

Company owners and management set the “feel” of a business. Some are laid back while some may have a stricter business model. Check out our article outlining qualities you should work toward: 3 Leadership Qualities of a Business Owner.

5. Problem solving

No matter how much you plan, problems happen. Those managing the operations need to be able to make decisions good for the company, sometimes under pressure. This article has steps you can take to improve your problem solving skills: 6 Effective Ways to Enhance Your Problem Solving Skills.