Becoming an entrepreneur: What qualities do I need?

Matt Henkes investigates the key qualities necessary to being a successful entrepreneur.

If the ingredients for business success were tangible elements, you can bet your last rolo that some enterprising entrepreneur would already have bottled them and made a tidy profit selling 'Business-Success-Balm' on the internet.

Unfortunately the necessary attributes of an entrepreneurial winner are somewhat harder to define than the various lotions advertised in your email inbox. A successful entrepreneur needs to be a large number of different things, sometimes all at once and sometimes at different times. Knowing when to leap and when to stay put could be as crucial to your success as knowing how to construct a decent sales pitch, and determination always goes a long way.

Taking the leap

Keith Willey, adjunct associate professor of entrepreneurship at the London Business School, says that, while you can look at most of it as a process which can easily be taught, there are some characteristics of a successful self-starter that "have to come from within".

"Spotting the opportunity is a bit of a trick, because an entrepreneur sees an opportunity whereas other people don't," he says. "You can learn it. It's how to do some quick and dirty analysis, about the feasibility of an opportunity; just enough analysis. Putting together a picture of an industry or market, and identifying a niche or something that no one else has spotted; then having the courage and the conviction to invest time and money.

"The thing that has to come from within is the calculation that says 'I'm going to do something about it'. That's more difficult to teach," he adds. "Ultimately, 'am I going to pack my job in and go and do that?' You can't teach people to make that internal calculation."

That decision is one that has to be made on a personal level, he says. The statistics tell us that around two out of every three new businesses will not be trading after the first three years. Work on the philosophy of "heads I win, tails I don’t lose too much," advises Willey. "Statistically the odds are against you, so you have to go into it with your eyes open."

"There has to be some creeping commitment," he adds "Which is more sensible, and then growing a business is about being able to get from the kitchen table to wherever your dreams take you."

Sales savvy

The ability to sell will be a major factor on which set of statistics you occupy. Obviously, this involves the basic selling of your product or service, but also the ability to sell people on your idea, whether you’re asking them for funding, or to jump on board with you.

James Lodge is the owner and founder of WowMugs.com, a manufacturer and retailer of colour changing, ceramic mugs. He developed the product in his garage and has grown his business using the skills he acquired in top flight sales and management.

"I've got a good technical background from my early years, and moving into technical sales was a very important step," he says. "If you have a product to sell, create or develop, somewhere in your life you’re going to have to get involved in sales presentations. That’s very important."

Lodge acknowledges that training was big part of his development in his pre-entrepreneurial years. "I went on as many sales and marketing courses as I possibly could," he says. "Some of those were funded by the companies, others I had done myself."

"I learned as much as I could about selling techniques. If you do that you tend to try and develop your own technique."

"Everyone has a different attitude of how to sell, and no one is completely correct," he adds. "What you need to do is view all different aspects of sales techniques. There are some hard sells and some soft sells. Not any one of them is the best. You need to find your own level in sales; find what your strengths are in front of the client."

Business sense: Know when to spend

Even if you can spot the things that others can't, and you can persuade a number of them to join or invest, "you still have all the ingredients for a huge failure", warns Willey. "There's what we call survivor bias," he explains. "You look around and see a group of successful business people who have inspired others to join them and put money into their venture, and have been a big success."

"What you don't see are the ones, exactly like that, who failed because they were deluding themselves and selling dreams rather than real opportunities."

If you can't back your sales skills up with enough business sense, you can easily be leading people up the garden path. "You've got to be a little bit wary, I would say, about the public stereotype of the entrepreneur," warns Willey. "You've got to be careful of the mythology. You do have to have the sales skills, but you also need to have the business sense to be able to deal with all aspects of the business. You need to have general management skills or be able to acquire them."

"Personally you need to start off with a certain amount of creativity, and an awful lot of passion," says Lodge. "That's where you've got to start from. But in order to drive yourself through, you will need some background in sales, marketing, management and technical."

"A lot of that you can buy in, but it can become very expensive."

"However, marketing for example, if you don't know what you’re doing in marketing, you're going to spend a lot of money and waste a lot," he warns. "There are ways to bring somebody in under a budget and say, I want to market the brand or the product and give them a fixed budget. There are some pros out there that will do the job very well."

"I would say, if you've got the sales and the management skills, then you'll probably be able to push your product through," he adds. "The skills will help you succeed, but if your product or services are brilliant, you won't need so many."

To find out who is crowned champion of The Pitch 2010, BusinessZone.co.uk's nationwide competition for small businesses, come to the grand final in London on 16 November. Click here for free tickets.