Updated: Oct 27
As the number of small businesses rises to 33.2 million in the US, so does the number of those that fail each year. In fact, more enterprises fail annually than those that survive, and this has been a consistent trend across various industries for multiple decades.
On average, 45% of new companies fail by the end of five years and 65% during the first ten years. Only about 25% of them make it over 15 years, and Forbes identified a lack of soft skills as one of the key reasons entrepreneurs fail. But what exactly are soft skills, and why does an entrepreneur need them?
Soft Skills Explained
Soft skills are interpersonal talents or character traits that help entrepreneurs relate with others and, in turn, help them to thrive in their workplace. Compare this with “hard skills,” which are specific to a particular job or task (e.g., proficiency with software or a trade). Entrepreneurs need soft skills in addition to hard skills because their success depends on how well they can relate to and communicate with their audience. This article highlights the necessary soft skills for entrepreneurs. Let's get started!
What Are Important Soft Skills That Entrepreneurs Should Possess?
Entrepreneurs take risks for their businesses, work tirelessly, and incorporate certain skills and strategies to ensure the venture doesn't fail. One of the most common questions people ask is, “What are three important soft skills that entrepreneurs should possess?” It may interest you to know that there are more than three, and most of them can be broken down into more granular soft skills. Here's a rundown of some of the most significant soft skills successful entrepreneurs should have.
Goal-setting is a blueprint designed to guide entrepreneurs and their employees toward a common goal and help them navigate the business' hurdles. Setting goals helps you identify the needs of your business; then, you can draw up a plan to achieve these objectives.
Setting goals can also help your employees understand the company's vision and ensure their efforts align. However, establishing objectives isn't something you do without a strategy or plan. When setting goals:
Ensure that every goal you set answers a “why” question and has a purpose. In simple terms, what problem does it intend to solve?
Ensure your goals are SMART (specific, measurable, attainable, realistic, and timely).
Don't procrastinate. Start no matter how small or big those goals are.
Break your goals down into bits and write down practical steps on how you intend to achieve them.
Identify timelines and dates for execution and set reminders.
Celebrate every milestone achieved, and don't beat yourself up if you didn't succeed. Just start over again.
During the COVID-19 pandemic, about 200,000 businesses in the US closed permanently. One reason for this closure (among many) was their inability to adapt to the highly demanding challenges that came with such a difficult time. So, as an entrepreneur, having a great idea and a committed team is not enough; you must be able to respond quickly to change. Adapting to instabilities in market trends, new technologies, and challenges that may arise will help you stay relevant and ahead of your competitors.
Lack of communication in the workplace has become one of the major reasons employees quit their jobs. Effective communication is a fundamental soft skill for entrepreneurs to convey their goals, strategies, and ideas to their employees, customers, and stakeholders.
Aside from communicating company goals, this skill will enable you to treat your employees like humans, not worker bees. Doing this will raise their morale, increase engagement, boost productivity, and make them go above and beyond to keep your company in business.
Companies worldwide spend tons of money on leadership development annually; US businesses alone account for $166 billion. So, you can't talk about entrepreneur soft skills without mentioning the importance of leadership skills for owners. To effectively motivate, inspire, make decisions, take responsibility, and lead your team toward achieving a common goal, you must sharpen your leadership skills.
5. Critical Thinking
Critical thinking is your ability to analyze data, think logically, and make informed decisions that benefit everyone. Possessing this soft skill as an entrepreneur will sharpen your problem-solving prowess and help you scrutinize the credibility of the information and data you receive. After an in-depth analysis, you can draw your conclusions or recommendations based on facts.
Understanding and appreciating who you are is an important soft skill to help you thrive. With self-awareness, you are well acquainted with your strengths, personality, uniqueness, and even weaknesses. This way, you can manage stress, make decisions, and build healthy relationships with others.
In 2017, LinkedIn undertook a survey to show how simple interactions can make a difference in the lives of people. According to the results, 35% of the participants found new opportunities following a casual conversation on the platform, while 25% developed new business partnerships. This shows the power of networking and how it can revolutionize your business game. Networking will help you build relationships, discover new opportunities, and attract potential investors and customers to your business.
How Do You Develop Soft Skills as an Entrepreneur?
Hard skills are often defined as “learned” skills, whereas soft skills may be seen as innate. However, soft skills can be learned and honed just like any hard skill. Whether you are a beginner or a business pro, learning the ropes on how to be an entrepreneur, gaining new soft skills, and joining programs that can help your business thrive is crucial. One sure way to develop soft skills is to join an organization of seasoned entrepreneurs with all the skills you admire.
EO Boston is a leading entrepreneurs’ organization with some of the best-performing business owners in Boston, MA. Whether you’re an experienced entrepreneur or just starting out, you can find the events organized by EO Boston to be a useful ladder for your growth and development.
However, EO Boston is not open to everyone, as only businesses that have made up to $1 million in revenue are permitted into the organization. Nonetheless, if you’ve recorded up to $250,000 in revenue, you can join the EO accelerator program, where you will learn all it takes to hit your first $1 million mark. Join EO Boston now.