6 Lessons You Didn't Learn in Business School (and Should Have)
Today's guest post is from Joanne Buckson a business freelance writer with a background in accounting and financial management. Did you go to B-school or perhaps recently graduated? Some food for thought on what you didn't learn but might need to succeed.
There are some aspects of running your own business that you learn in college, and there are others you simply have to learn through experience and trial and error. According to the Kauffman Foundation, 47 percent of company founders have advanced degrees, which means more than half of today's entrepreneurs are getting their education outside the classroom. Consider these five lessons a supplement to your formal education:
Table of Contents
Manage Cash Flow When Money Is Tight
Starting out requires a lot more investing than you might think, and the payback probably won't come as early as you'd hoped. Prepare your cash flow for next year, next quarter and even next week if funds are especially scarce, but remember that these figures aren't entirely accurate. Sometimes receivables come in later than expected and sometimes you earn less or more than expected due to seasonal sale fluctuations. Bottom line: Be conservative.
How to Be Everyone at Once
When you own your own business, you assume the position of CEO, accountant, HR rep, landlord and cleaning staff. This requires major time management skills on your part, but it also helps to have a few digital assistants. Michael Carney, owner of the Chicago firm MWC Accounting Inc., swears by the iOS app LessAccounting. Using the app's budgeting feature, business owners can quickly compare cash flow from previous months, bringing together online banking accounts, credit cards and even PayPal accounts.
Motivate and Communicate
Whether your business is a one person, 10 people or a fortune 500, communication and presentation are key to furthering your business goals and motivating employees and clients. Keep an open flow of communication between you and anyone doing work for you. No matter who you are speaking for or to, treat it like a presentation. Give it your all and don't be afraid to talk up your business any chance you get.
Handling Insurance and Contracts
Even if you work from home, it's important to make sure you have proper insurance coverage. The Hartford, for instance, specializes in providing insurance for both businesses and families. Look for plans that offer coverage for everything you need, but no more. Talk to your insurance provider and your lawyer about concerns with worker's compensation, and review your coverage plan at least once a year to avoid paying more than you need to.
Be Your Business' Conscience
If you've been slaving over your IRRs (internet rate of return) and DCFs (discounted cash flow), we hate to break it to you, but: They're not really as useful as your profs claim. At least, according to investment expert Brett Nelson. Quoting a friend who works as a finance chief, Nelson reiterated that a career in corporate finance requires professionals to be the “conscience” of the business. This includes analyzing decisions and maintaining a strong understanding of business goals and operations.
Bite Off More Than You Can Chew
It wouldn't be business if you only play it safe. Entrepreneurs are often advised to approach the early development stage tentatively, but sometimes over-promising can be an effective campaign strategy. Challenge yourself by setting your growth targets high, and you might be surprised what you can accomplish.
Hi Michelle,
Thanks for writing this up. Personally, I think what school doesn’t teach is the motivating part. As a leader (I work as a manager), it is very important to keep your best men working at their best. At times, you need to give them leeway and guide them properly.
After all, human does mistakes and we need to show them the right path to go.
Well written and thanks for sharing!
Reginald
Hi Reginald! I think you are absolutely right about motivation. I have friends who really bust their butt to meet deadlines, and they have no idea why. It’s not like they are going to get anything more than a “thank you” if they are lucky. Motivating employees is KEY to keep them engaged and happy.