Are you a budding entrepreneur? Perhaps you're studying for a Graduate Certificate in Business Administration or other related business qualification. You might be planning to launch a business when you finish your studies or during them. If you have a brainwave about an innovative product or service that can solve a pain point for a customer, launching a business can be the best way to get that product or service onto the market. However, running a business is no mean feat. It takes skill, talent, a great team, and business literacy to achieve. But what is business literacy, we hear you ask? This helpful article will share what this term means and what the benefits are for budding entrepreneurs. Continue reading to learn more.
What is Business Literacy?
Running a business is not like playing a game of chance or luck, leaving the outcome to random determinants. Even with an innate entrepreneurial mindset or nous, trusting your ideas to generate revenue and profit isn't enough to achieve business goals. Depending on the nature of the business, you'll have to manage production, distribution, software development, customer satisfaction, or perhaps more factors. Without the right knowledge and "literacy" to run a business, you may make easily avoidable mistakes and limit your chances of success.
If we consider the term literacy in the usual sense, it means someone's ability to read and write and to parse ideas from text or other inputs. Translated to a business setting, it means your ability to understand business concepts and translate them into action. Business literacy means having a firm grasp on all aspects of business, which a degree like a Master of Business Administration or related qualification can teach you.
What Types of Knowledge and Skills Comprise Business Literacy?
The next part of this article will cover the precise knowledge, skills, and experience that can comprise business literacy.
Economic Knowledge
No matter the industry you plan to enter with your business, you'll benefit from having a basic understanding of economics and economic policy. For instance, you'll understand inflation and the pressure it can place on the cost of living, which will impact the people or businesses that may potentially purchase your products or services.
You will also gain an understanding of pricing tactics when it comes to setting a price point for your offerings. Furthermore, you'll learn about supply and demand and how it can impact your business, as costs for materials, production, manufacturing, labour and more can vary depending on market fluctuations.
Financial Accounting
Even if you plan to leave the number and budget crunching to others in your business, such as a Finance Manager or CFO, understanding basic accounting can assist you in your entrepreneurship. This may seem hard to grasp, and accounting can be a difficult subject, but it's worth learning about to round out your business literacy.
Understanding how corporations perform financially and how this impacts performance, revenue, and profit margins is essential. Learning about cash flow, profitability, and profit margins and being able to read and comprehend a balance sheet are essential financial knowledge that will assist you in launching and running a successful business.
Data Analytics
In the current financial and corporate climate, analytical skills and reasoning are in demand. Even if you plan to remain in a leadership role at your company, such as CEO or Managing Director, having a basic understanding of data analysis will serve you well as you develop your business literacy skills. You'll also want to know about this if you plan to hire data or business analysts, which you should definitely consider.
Learning how to synthesise and make sense of datasets, identify data trends and test hypotheses based on data will enable you to make difficult decisions and identify challenges to your business. Don't underestimate this skill in your suite of business literacy tools.
Negotiation
This soft skill is essential for any business owner or entrepreneur. It will be advantageous to learn how to negotiate whether you plan to launch a startup or work your way up at a company to a senior level. For instance, if you hire someone, being able to negotiate a fair salary is a key skill. Or negotiating better rates with vendors, or when a vendor isn't holding up to their end of the deal. This skill can also assist with complex social situations, such as dispute resolutions or mediation sessions.
Business Management Literacy
Another essential aspect of business literacy is business management skills and knowledge. As an entrepreneur, you need to understand and comprehend how to manage a business. Even if you're more of an ideas person, if you can't translate your ideas and learn how to run a business, you'll be floundering from the start.
For instance, learning how meetings run, how to manage and convey organisational change, learning about errors staff can make and how to learn from them will all serve you well in your career. You'll also want to learn how businesses operate in terms of management structures, policies, procedures and guidelines.
Decision-Making Ability
As the boss, you're going to need to make decisions every day during the course of launching your startup or managing your business. Being paralysed and unable to make a decision can cripple your operations and lead to rapid failure.
For instance, on any given day, running a business requires making a variety of decisions, such as how to distribute human resources, who to include on key projects, which team members excel at certain tasks, and what their development areas are. You may also have to make highly time-sensitive calls, such as when to launch a product or service, when to fire someone, or other critical decisions that require immediate attention.
Networking
Have you heard the saying, "If you're not networking, you're not working?" This rings true for entrepreneurs as it does for any other corporate worker. Building strong professional networks can be vital for success, both for your company and for your personal growth and development as a business owner or founder.
Having a solid network can improve your chances of success, as having the right people around you can increase your performance, as well as that of your business. It can also help when it comes to filling key roles; if you've got suitable people in mind from your network, you can tap them on the shoulder to apply.
A Business Literacy Conclusion
This helpful and informative article has shared the benefits of business literacy for entrepreneurs. We've also informed you about what business literacy is and what some of the key knowledge and skills that comprise it are.
