By Cristhine O

Skillset vs Mindset: How to Master New Skills in Business

At a weekend workshop designed for public speakers, a student stood out. This student, who worked as a programmer, had a rather reserved and unassuming personality. The seminar started and ended with each participant delivering a speech to the entire class. The goal was for there to be an improvement in each speaker’s abilities by the end of the week. However, it was evident that this particular student had a significant amount of progress to make compared to the others.

In his first speech, the programmer chose to talk about his profession. However, he lost the audience within minutes because he lacked fundamental public speaking skills. This leads us to the question: What could this student do in one weekend to compensate for his lack of public speaking skills?

One advantage he had was his unwavering determination to become a better public speaker. Throughout the weekend, he immersed himself in learning and made the most of every opportunity to improve. His dedication paid off, as his final speech matched the quality of those delivered by the more experienced speakers in the group.

After the class, he continued developing his newly discovered skill to improve his business. Today, he captivates audiences by simplifying programming to the average individual.

The programmer’s willingness to learn was a fundamental part of his skillset vs mindset, which played a vital role in preparing him to learn a new skill. Thus, mindset, the ability of the mind, precedes skillset, the ability of the hand. See our mindset article to learn more about mindset.

New mindset to learn a new skill
New Mindset. New Results.

 

The conviction that success is attainable, combined with the skills and a willingness to acquire new ones, makes an entrepreneur capable of achieving anything.  After developing the right mindset, it is also important to focus on developing the right attitude about skillset. A skill set, after all, is the learned ability to complete specific tasks.

How to Gain a Skill 

You don’t necessarily have to start from scratch to become an expert in a new skill. Instead, you can find a mentor and follow their lead. Find someone worth emulating and work backward to get to their level of expertise.

For instance, Christopher Wick has always admired and looked up to Warren Buffet since he was a child. When Wick discovered Buffett started his first business at a young age, he worked hard to achieve the same feat.

When you’re learning a new skill, you must avoid getting lost in Google searches. There are thousands of resources on Google, and more often than not, that can be a problem. Learning a new skill is not synonymous with becoming an immediate expert. Again, it’s important to remember that learning a new skill doesn’t require you to become an instant expert.

To learn a new skill is not an instant result.
Skill acquisition is a journey, not an instant result.

 

If Wick had Googled Buffett’s earliest businesses, he would have discovered that:

Warren Buffet had engaged in different financial pursuits before he was 18. He collected and sold stamps, sold gum to neighborhood kids, and even sold Coca-Cola from door to door. Like many boys of his era, he had a newspaper delivery route. As a teenager, he ventured into other businesses like selling and maintaining pinball machines collecting and cashing in discarded betting tickets from the race track, amongst many others.

However, this is too much information. If Wick had tried to replicate every business move Buffet made, he would have failed. By the time Wick reached his teenage years, door-to-door Coca-Cola sales were no longer a thing. Wick did not live near any horse racing venues, and the era of pinball has given way to video games.

Instead of copying Buffet’s actions, Wick focused on understanding and learning Buffet’s mindset. Buffett was attentive to the needs of people. He strategically positioned himself to benefit from meeting those needs. He also sought out opportunities in business transactions, where others would have overlooked potential profits.

Wick incorporated this enterprising mindset into his approach. He was able to follow Buffett’s example to become a successful young entrepreneur. Instead of depending on Google, Wick sought out a role model worth emulating. Rather than trying to duplicate Buffett, Wick learned valuable lessons from his mindset, which contributed significantly to the development of his skills.

Why Entrepreneurs Need a Strong Skillset 

There is an argument that a successful business owner doesn’t necessarily need many skills. Those who make enough profits can delegate tasks to competent employees and outsource to professionals.

This reasoning does hold some truth. Managing a successful business requires expertise and mastery of numerous skills. But it is unrealistic for a business owner to attempt to master it all. There are certain situations where delegation and outsourcing are necessary. While having sufficient revenue to outsource tasks is ideal, it’s also important to recognize that all business owners still need fundamental skills, as income alone cannot substitute for ability.

Entrepreneurs needs a strong skillset
An entrepreneur with a diverse skill set.

 

There is a difference between skillset and skills. Skillsets surpass skills because they extend beyond the mere execution of tasks. For instance, the ability to run payroll is a skill, while having enough expertise in human resources to determine whether an employee needs overtime pay is a skillset. Entrepreneurs need to balance their know-how and knowledge to oversee their business.

However, there is a balance. While entrepreneurs need many skills, they must discern the most important skills to learn. Even the most accomplished entrepreneurs are limited to twenty-four hours in a day. Instead of trying hard to become an expert in every task in their business, entrepreneurs should focus on their areas of expertise.

Business owners who excel in specific areas of business should strengthen those skills. A business owner mustn’t allow the pursuit of skills to become overwhelming and burdensome. Acquiring some skills can be a waste of time. Determining which skills are important or not varies among different business owners. However, two essential skills shouldn’t be outsourced or delegated.

How To Improve Financial Mastery

    • The first essential skillset is financial mastery.

Entrepreneurs do not have to be bookkeepers, but they should have a solid understanding of financial statements. A business owner should be aware of the financial well-being of their company. They should also validate all documents presented by hired financial professionals.

The most critical financial statements to learn are:

    • profit and loss statements

    • cash flow statements

    • balance sheets

Take a moment to reflect on this informative excerpt from an article on 5 Pillars of Business:

“Here is a simple way to remember these three statements: The profit and loss statement compares the amount of money made (earnings) to the amount of money kept (savings). The cash flow statement shows where the cash went and where it is now. A balance sheet shows what is owed compared to what is owned.”

Balance sheets
Balance sheets: Keeping your business on track.

 

For example, let’s assume Christopher’s Coffee Shop makes $100 when 10 customers buy $10 coffee each. If the net profit margin is 20%, the coffee shop made a $20 net profit.

The day’s sale should be recorded in the coffee shop’s profit and loss statement. Out of the $100 in sales, there was a profit of 20%. That means there was $80 in operating expenses to acquire that profit. Simply put, the business spent $80 in expenses and payroll to generate $100 in sales.

Now, let’s consider the same scenario in terms of a cash flow statement. $100 entered the business as sales revenue, and $20 of those sales was earned as profit. The remaining $80 accounts for expenses related to purchases made several weeks ago.

Two weeks ago, the vendor for coffee beans and cups charged 50% as a down payment. Some of the $80 in expenses that reduced revenue were also used to pay baristas. The trajectory of cash involves multiple stages and is often not concluded within a single day. The cash flow statement assists business owners in tracking the flow of money.

The balance sheet also plays a vital role in the operation of the coffee shop. Let us assume that Christopher purchased the land on which his coffee shop is situated. The mortgage is $100,000 over ten years. The property costs $200,000, but he made a down payment of $100,000.

The balance sheet shows that Christopher owns $100,000 (the down payment) and owes $100,000 (the outstanding mortgage). The percentage of the property he already owns is an asset, and the percentage of the property that he still owes is a liability. Thus, assets are what you own, and liabilities are what you owe.

Assets and Liabilities
Assets: What you have. Liabilities: What you owe.

 

To practice your new skill, ask your accountant or bookkeeper to review last month’s financial statements with you.

How To Master Habits and Routines

    • The second skillset is habits and routines.

To properly develop these skills, you need to have the proper mindset. It’s also essential to understand the interplay between skillset vs mindset. Skillset and mindset are closely connected.

Almost, if not all entrepreneurs struggle with disorganization, maintaining a structured schedule, and the pressure of having a heavy schedule. They often find themselves making statements like my schedule is insane. But what does the word “insane” say about you as an entrepreneur?

It simply interprets to the entrepreneur saying “My schedule is illogical, crazy, chaotic, and mental.” Statements like this can create an unfavorable impression about you and your business when you’re trying to negotiate an acquisition deal. It is important to note that a scheduling problem is not a personal problem. Instead, it results in lateness to meetings and missing deadlines, which reflects poorly on the entire organization.

Having a firm grasp on your schedule and routine begins with the mindset. Here are some examples of limiting beliefs that lead to a negative attitude toward a routine:

How to Master Habits and Routines
Examples of negative attitudes towards a routine.

 

What is the deeper mindset issue? Entrepreneurs are naturally inclined to make their own rules. They set the stage, build a reliable framework, and create new ideas. Entrepreneurship demands a certain degree of creativity. However, some people believe discipline stifles creativity and routines are excessively structured.

A sense of structure does not have to be stifling or restrictive. In the end, everyone is in control of their schedule. Even the most creative individuals accept routine in other aspects of their lives.

Take a minute to think about how people get to work every morning. Three different people may have three completely different routines. But they consistently stick to their routines every morning. Generally, people do not usually blow dry their hair before washing it. Creative people do not go to work, return home to brush their teeth, and then head back to work due to a sudden burst of spontaneity.

Morning routines are so structured and familiar that people complete them with minimal effort. Entrepreneurs have the power to create routines for their businesses. These routines aren’t new or difficult to understand. They are skills that most people have already mastered since elementary school. Entrepreneurs need to learn how to apply organization and structure to their business.

Teach yourself to ask whether your problems are rooted in your skillset or mindset. Mindset problems arise from your mental perspective (mind), while skillset problems affect your handwork or abilities. The solution will often require a combination of learning to improve thinking and learning to acquire a new skill.

Improve thinking and change mindset
Enhance your skills and change your mindset.

 

Moving forward, the next time you run into a problem while running your business, consider taking a step back to approach it from a fresh perspective. The first thing you want to do is to consider if it is a mindset or skillset problem. Figuring this out is enough to transform your workday. Business owners tend to face more mindset problems than skillset problems.

If you need more help with mindset problems, you can check out our article on mindset.

Final Note

“As an entrepreneur, there should be a really long list of the things that you do not do, the skills that you will not pick up… for example, there are things that I automatically refuse to know about. I’ll say, ‘hey, that’s not a task for me.’ I’m sure one of my team members can do it, or we can hire someone. I really need to keep my brain cells for what I’m really brilliant about to perform at the highest level.” -Christopher Wick.

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