Entrepreneurs today are at the heart of every growing nation. It is widely recognized that entrepreneurs can make a positive contribution to society, from creating jobs and innovating to engaging in philanthropic work. Today, entrepreneurial skills go beyond the traditional business skills such as effective leadership and strategic planning. An aspiring entrepreneur should have a wide range of skills, from financial literacy to business planning and marketing skills.

1. Financial Literacy

Financial literacy is a crucial entrepreneurial skill for MSMEs to manage their finances and secure a business loan. To assess your eligibility, lenders will ask you to provide business-specific documentation, including financial statements, budgets and cash flow projections.

Inadequate financial knowledge makes it difficult for entrepreneurs to explain to lenders the key metrics of their businesses. This leads to two common outcomes –

Lenders who reject the MSME Loan Application
The MSME accepts unfavorable conditions and terms for the business loan. For example, higher interest rates or shorter repayment periods.

You can improve your financial literacy by using one of the following methods –

Online courses – Short-term and Long-term courses can be enrolled online. These courses cover the fundamentals of finance such as tax planning, fundraising and financial modelling.

Attending Workshops – While workshops do not always provide a comprehensive understanding of financial concepts, they can assist MSME in gaining a basic knowledge about balance sheets, income statement, and cash flow statements by using real-life examples and case studies.

Hiring financial advisors –Financial advisers provide personalized advice based on each MSME’s business, goals, objectives, tolerance for risk, and investment goals.

2. Business Planning

This is a key entrepreneurial skill which shows your ability to implement business strategy and operations. When applying for an MSME Loan, a lender will require a business plan.

Without a carefully crafted business plan,

Investors or lenders may reject a business proposal if they find it to be flawed or risky.
It can be difficult to find talented employees.
You could lose out on valuable clients and opportunities for partnership with other entrepreneurs.

Three main topics should be included in a well-thought out business plan –

Market Analysis –A thorough analysis of the market you are targeting is done by answering these questions.

Who are your ideal customers? The target customer for a company that delivers meals would be people who live within 15 KM of the central kitchen.
What is the demographic profile of your customers? What are the demographics of these customers?
What is your competitor’s market share?
What are your plans to differentiate yourself from your competitors’ products or services?

Financial Projections –You should also estimate future business performance using solid assumptions and data. Lenders will expect you to include the following metrics within your business plan.

Sales Forecast – Revenue estimates for the following three to five years.

Estimated cost of production of your goods or services

Operating expenses Estimated costs such as salaries and rent, marketing etc.

Income statements – Estimated net income.

Cash Slow Statements Estimated Inflow and Outflow of Cash.

Breakeven analysis — Estimated time frame for when the company will reach the break-even point.

Operational Strategy –This part of the business plan will explain how you will run your business on a daily basis by answering the questions below –

How will you deliver your service or produce the product? Details include manufacturing processes, supply chains, and quality assurance measures.
Where will you manufacture the goods? Included in this information is the size, layout and maintenance plan for the facility.
How will you deliver your products to customers? This includes the transportation, order fulfillment, and warehousing processes.

3. Alternative Funding Options

In the current market, the ability to obtain business funding quickly is a major trend. You will gain from the ability to explore new financing options in two ways – hassle-free business loans application and no collateral business loan.

Fintechs have developed many new financing options. Below are a few solutions you can consider –

With invoice finance you can use your outstanding invoices to secure a loan. You can avoid credit checks with this solution. Flexiloan provides business loans up to Rs 2.5 crore against invoices, which can be used for urgent Working Capital Loan requirements.

Merchant Cash Advance (MCA), provides you with an immediate funding based upon future sales made using credit/debit card. Flexiloan provides MCAs up to Rs 1 crore. Your business loan is repaid as soon as your customer swipes their card.

Peer to peer (P2P), lending platforms, connects the borrower online with individual investors or lender. These platforms offer more flexibility for business loans and faster approval processes.

4. Credit Management Skills

Nowadays, it is much easier to get a line of credit of any kind. Credit cards, personal loans and term loans are becoming more popular. With easy access to capital comes the risk that your credit score will be poorly managed.

Your credit score is negatively affected by late payments and the full use of your credit card limit. Poor credit scores can affect your future financial needs, interest rates, and ability to attract new clients.

Follow these simple tips to improve your credit management skills.

Pay your bills on time.
Use your credit card with care.
Credit reports are important for monitoring.
Building credit history
Separating personal and business loans

5. Technology Adoption

The technology has a significant impact on the daily functioning of businesses. Your business acumen can help you to stay ahead of the competition as an entrepreneur. These tools can automate many tasks in your business, including bookkeeping, invoices, tax preparation, tracking expenses, cash flow and financial reports.

Here are some examples of how you can use these tools to free up time and resources –

Automated invoicing and expense tracker tools can save you time and money by removing manual data entry.
Budgeting and cash flow projections can help you manage the liquidity needs of your business.

6. Data Skill

You may need to expand your business or develop new products in order to grow. These business decisions are too important to rely on gut instinct.

According to Forbes, data skills are among the 10 most in-demand and future-oriented skills. When you show enough patterns and trends, lenders, investors or clients will feel confident in your decision.

The following 3-step process can be adopted to cultivate data-driven entrepreneurial skills in your company.

Learn how to collect data both from internal and external sources. Sales figures, customer feedback and other operational metrics are examples of internal sources. External sources include market research, industry reports and demographic data.
tools for data analytics are able to transform raw data into meaningful insights, in the form charts and graphs.
Last but not least, you can’t get any meaningful insight unless your mind is trained to look at the results in a cause-and effect perspective. Cultivating an analysis mindset will help you make data-driven decisions.

7. Market research and Opportunity Identification

It is important to conduct market research in order to better understand your target audience, the industry, and your competitors. If you don’t conduct thorough market research, it can lead to the following –

Offer a product or a service that is already saturated.
Offer a product at an overpriced price or a low-priced one.
A marketing campaign that is ineffective will waste resources.

To gather market intelligence, you can use the following strategy –

Survey customers to learn about their needs and wants.
Monitor the marketing campaigns and product offerings of competitors to identify gaps and areas for differentiation.
Attending conferences and events in the industry to get insights from experts.

8. Marketing and Branding Strategy

You may lose loyal customers to your competitors due to the increasing use of social media. Marketing skills that are effective can benefit your business in the following ways –

Brand awareness is a great way to increase brand recognition.
Attracting new clients.
Differentiating yourself from your competitors by offering a product or service that is superior.

The steps below will help you develop this crucial entrepreneurial skill.

Design a visually appealing brand image, such as a logo, color and other design elements, to tell a compelling tale.
By highlighting customer problems, you can differentiate your unique proposition value via marketing channels.
Create marketing material to educate and entertain your customers while informing them about the product or service you are offering.
Analytics and data can be used to continuously measure the performance in marketing campaigns.

9. Networking

You want to stay up-to-date with the latest industry trends and expand your talents. By introducing you with someone who has been in your position, effective networking can help solve some of your business problems.

To improve your networking skills, you can use the following best practices –

Having connections with angel investors, crowdfunding platforms and fintech companies can assist you in obtaining a business loan. These connections often offer flexible credit lines.
Attending conferences and events in your industry can help you find investors or present your product to a large audience.
Create a strong personal brand online on platforms such as LinkedIn and Instagram to establish your expertise and credibility.

10. Risk Management

You don’t always know the future. A skill in risk management allows you to prepare for unfavorable future conditions. A bad business situation can lead to financial and operational challenges for your business.

Decreasing the demand for a product
Reduce your cash reserves
Cyber attacks are a threat to businesses with outdated technology platforms.

Follow the steps below to develop this entrepreneurial skill.

Diversifying revenue streams ensures that your business has multiple income sources.
Having enough cash reserves will help you to maintain your cash flow during the off-season.
Cyber Security measures are designed to eliminate data leaks and system failures.

Conclusion

The technological advancement empowers the consumer in a way that has never been seen before. The consumer is empowered to quickly change their preferences and values. This change can be overwhelming to an entrepreneur. They can also have a greater impact on the society and their businesses. Equipping yourself with these entrepreneurial skills will put you in front of your competitors and help you better serve your customers.