How much do you need to know about business to build one?

One of the scariest things about building a business is that you know - going in - that there's a lot of stuff you don't know about. Chances that you know about marketing are relatively small, lead nurturing is a mystery and sales is that big scary thing we're all afraid to do. Business finance can be a scary thing for most people, and a business model is something we've heard about but don't really care about much - it can't be that hard, right? The lack of skills has never been an excuse to hold us back. We know that we're going to have to learn as we go, and we also know that we can outsource stuff to someone who can help us.

But just how much do you need to know about business to have a decent chance of success? And what do you need to be good at?

You don't need to be expert at everything

It turns out that you don't need to be expert at everything in business.

In fact, the only thing you really need to be good at is the product or service you're delivering. Your expertise is what people want and need - and they're willing to pay for it. So you need to be pretty good at it.

You don't need to be expert at much else to run business - you can outsource a lot of it or get away with just being able to get the job done.

But you can't abdicate responsibility.  

If this is your business, the buck starts and stops with you. You're going to have to know at least enough about all the different parts to know if someone is doing a good job for you. And if you're doing something yourself, you at least have to get the job done reasonably well.

So how good do you have to be? There's a rating system for that.

A rating system for business skills

Back in 1980, Stuart and Hubert Dreyfus developed what became known as the Dreyfus Model - a model for defining skill levels. That first version of the model was later revised by Stuart in a paper in the Bulletin of Science, Technology, and Society where he broke skill levels down into five categories.

I've adapted the original skill levels specifically for business. They are:

  • 1: Novice - you may know some buzzwords but you wouldn't be able to tell if someone is doing a good job;
  • 2: Supervisor - you know just enough to tell if someone is doing a good job, but you won't be able to do it yourself;
  • 3: Competent - you can follow a recipe to get the job done;
  • 4: Skilled - you adapt recipes and create your own to get better results; and
  • 5: Expert - you can teach this stuff.

You can probably already see that you need to be (at least) Skilled at the product or service you're delivering. If someone else is doing you marketing you will need to be at Supervisor level (or better). And if you're doing your own marketing you will need to be at least Competent but aim for Skilled.

So, how is this useful?

What are the different parts of a business?

We know that a business must include things like marketing, a brand, some products or services, and so on. But what are all the parts of a business?

Fortunately, there's a system for that too. It's called the Tornado Method.

The Tornado Method is a framework for designing, building and growing a business. It contains 11 elements in three layers - and these are all the elements you need to build, run and grow a successful business. Get these 11 right and you will have a successful business.

If you're not yet familiar with the Tornado Method, watch this 3:30 video.

Here's what the Tornado Method Top Level looks like:


There's a lot more to the Tornado Method than just this top-level diagram. But you should be able to look at this diagram and recognise all the bits that go into a business - and that's enough to find out just how good we need to be at each part.

How good are you now, and how good do you need to be?

You now know about the skill levels for business, and you know about the Tornado Method top level that contains all 11 elements of a successful business. Lets combine the two:


In this diagram we've overlaid the Tornado Method top level diagram with a rating scale for each of the 11 elements. Your job now is to figure out how good you are in each of the elements, and how good you should be for your business to succeed.

Here's how to do it:

  • Start with Marketing.
  • Circle your current skill level.
  • Now draw a second circle around the skill level you think you should have (the two circles can overlap).
  • Repeat for the other 10 elements.

Here's a guideline:

  • You need to be at least Skilled (4) or even Expert (5) at Delivery. Your expertise is what people are buying.
  • If you're outsourcing stuff to other people, you need to be at least Supervisor level (2).
  • If you're doing it yourself, you need to be at last Competent (3).
  • You should aim for Skilled (4) in the Getting Stuff Done layer.

Here's what this can look like:


Note that some areas have only one skill circled - that's where your current skill level matches the skill level you would like to be.

How does this help?

First of all, don't let a lack of skill get you down. No one starts with all the skills they need at the level they need - we're all learning on the job.

Rather, use this as a guideline for where you should be improving your skills. You're already busy, so you need to choose the areas where you're going to focus with some care - but here's what I've found:

The area we're most reluctant to get better at is often the area that will deliver the biggest improvement in our business.

Marketing is one area which we often feel we can outsource, but you really need to understand the principles so you can assess whether your marketers are doing a good job for you. You will usually need to do your own sales, so if you're really afraid of sales and your skills are not where they should be, focus here.

But remember, you don't need to get from Novice to Skilled in one go, and you won't get there overnight. Just recognise where you need to improve, and put a plan in place to get there - even if it's getting better at something just 1% per day.

What you can do now

Take a screenshot of the diagram above and rate yourself - you may be surprised to see where you can improve your skills. Then put a plan in place to get better - even if it's just a plan to get better 1% per day.

And read more about the Tornado Method here - it's a framework for designing, building and growing a business. Get all 11 elements in the Tornado Method right and you will have a successful business.

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