The most successful entrepreneurs are said to possess business acumen. Business acumen, together with vision, business savvy and shrewdness, propel the business magnates to the top of entrepreneurial ladder.
What really is “business acumen”?
Wikipedia defines business acumen as the ”keenness and quickness in understanding and dealing with a business situation in a manner that is likely to lead to a good outcome.” It is that intangible quality best shown by the ability to spot opportunities and generate a continuous flow of profits. It is the ability to look at the big picture — and make the needed decision fast and quick to ensure constant stream of cash flow and profitability. In simple terms, business acumen means a solid grasp of how a business should make money.
If you want to succeed in business, you need to hone your business acumen. You need to develop that ability that allows you to quickly and deeply understand opportunities that you see in business, helping move your business to success. Working to improve your business acumen can lead to better business results and increased profits.
How do you develop business acumen? While some are just born with it, there are a variety of ways that can help you hone your business acumen as long as you have the basic smarts and an unwavering commitment to learning. Here are some strategies for improving and sharpening your business acumen:
Keep an open mind to learning
The first step is to nurture your thirst for knowledge. Instead of adopting an “I know it all” mode, be open to new learnings. You will never develop your business acumen if you are over confident or close-minded.
Good leaders never stop learning. Even if you think you are already smart and great, there are always things that you can learn from other people and from observing what you see in the economy and in your industry.
There’s a vast amount of knowledge out there that can help you hone your business acumen. Take time to read books to be inspired and get ideas for your business. Here are some recommended books that can help you develop your business acumen:
- Unlimited Power : The New Science Of Personal Achievement
- The One Minute Manager
- Think and Grow Rich: The Landmark Bestseller – Now Revised and Updated for the 21st Century
- The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change
Build relationships with the right people
The best way to develop your business acumen is to learn directly from people who have it. Network and interact with experienced entrepreneurs and people who appear who have strong business acumen. Go out and network, not just online and in social media, but in real life such as Chamber of Commerce events, seminars and workshops and other meetings.
Get to know them enough that they’d be willing to work with you. You can set up joint ventures, hire them as consultant or arrange a mentorship relationship with them. As they say, steel sharpens steel. If you get someone with highly developed business acumen to mentor you, it’s like striking gold! The firsthand experience that you get from observing them up close can be an important source of learning to help develop your business acumen.
Learn how to observe
Observation is a powerful learning method for entrepreneurs. You can learn a lot from watching others. You can create opportunities to pursue in your business by observing trends and finding gaps in marketplaces. You can gain insights into your customers’ needs and wants through observation. In fact, many successful entrepreneurs stumbled upon great ideas from observing attitudes and behaviors, including their own.
Watching an experienced entrepreneur navigate various business challenges and issues can be a very powerful experience for a new business owner. However, it is important for entrepreneurs, not just to watch, but to see and then ask questions. The only way to understand the problem better is to have the ability to ask right question.
If you don’t have the opportunity to work closely with a successful entrepreneur, then look for a business or organization that you admire, and try to understand how the parts fit together as well as how the sum of all the parts fits in. Observing how other businesses operate can give you a different perspectives and ideas that you can use on your own business.
If you’re in the service business, for example, go to Starbucks or Nordstrom and observe how they do things – from dealing with customers, to displaying their inventories and products. Understanding how businesses work and constantly endeavoring to find new ways to do things is important in the success of a small business.
For more information on what is business acumen, watch this video:
Recommended Books on How to Develop Business Acumen:
- Seeing the Big Picture: Business Acumen to Build Your Credibility, Career, and Company
- What the CEO Wants You to Know : How Your Company Really Works
- Winners Dream: A Journey from Corner Store to Corner Office
- Raise the Bar: An Action-Based Method for Maximum Customer Reactions
- Execution: The Discipline of Getting Things Done
- Learning from Experience and Success in Business
- Build the Leadership Skills You Need to Succeed in Business
- Importance of Continuous Learning for Entrepreneurs
- 5 Rules of Outsourcing: How to Find the Right Professionals
- Understanding Basic Business Principles