Chapter 5: Personal Competencies

-Competency is the capability to apply or use the set of related knowledge, skills, and abilities required to successfully
perform ‘critical work functions or tasks in a defined work setting.
- “having requisite or adequate ability or qualities”
 Skills are smaller-scale abilities that can be learned quickly through training or practice.
 Competency can be thought of as the overarching compilation of requisite skills, knowledge, or abilities.
 Capability refers to the potential an employee has to acquire a KSAO or competency. It can turn into a
competency with the necessary guidance and training.
 Competencies are the qualities that make someone an expert in their role or field.
 Intelligence-a high mental and cognitive capacity. It describes a “good thinker”.
 Competency- possession of adequate skill, knowledge, experience, and capacity to apply this in practice.
Competency-based Assessment
-Refers to any tool that is used to measure the observable behaviors that successful performers demonstrate while working
on any given job.
-Should be based on clear job requirements and produce consistent and reliable results.
PERSONAL ENTREPRENEURIAL COMPETENCIES
Well-known research on human behavior is done by McClelland and McBer and is able to identify behavioral patterns
grouped into three general clusters: the achievement, planning, and power clusters
Opportunity-seeking & Initiative
-Entrepreneurs seek opportunities and take the initiative to transform them into business situations.
Persistence
-When most people tend to abandon an activity, successful entrepreneurs stick with it.
Commitment
- “Commitment is what transforms a promise into reality.”-Abraham Lincoln
Quality Efficiency
-Entrepreneurs try to do something better, faster or cheaper.
What is efficiency?
 Take Calculated Risk
-Entrepreneurs seek opportunities and take the initiative to transform them into business situations.
 Goal setting
-Entrepreneurs set goals and objectives which are meaningful and challenging.
 Information seeking
-Entrepreneurs gather information about their clients, suppliers, technology and opportunities.
 Systematic planning and monitoring
-Systematic behavior means acting in a logical way. Planning is deciding what to do. Monitoring means checking.
 Persuasion and networking
-Entrepreneurs influence other people to follow them or do something for them.
 Independence and self-confidence
-Entrepreneurs have a quiet self-assurance in their capability or potential to do something.

Lesson 2: DEVELOPING YOURSELF FOR ENTREPRENEURSHIP

1. Strengthen your Mind
-Entrepreneurs are constantly looking to grow and become better individuals.
-They know the value of developing a healthy mind with good thought patterns.
-You need to know how to feed your mind and enable it to grow.
You become what you feed your mind.
-Your mind has to be renewed each day. To condition yourself for true
- Entrepreneurship you have to get around successful people and find out what they are feeding their
minds with.
What you feed your minds determines your appetite.
-All actions flow from our thoughts and therefore for an entrepreneur to develop an appetite for strategic and bold
action they have to strengthen their mind and develop a capacity for knowledge that has the power to start and
grow a successful business.
2. Dream Obsessively
-People who dream big have a unique combination of brain chemistry that allows them to dream unrealistically
combined with an ability to take a risk along with the different action steps needed to achieve their dream.
3. Internal Governance
 -Before you make any kind of decision the final person you consult with is yourself!
-Prayer and meditation allow you to calm yourself and brings you to a place of wisdom and understanding which
is invaluable for decision makers.
-If you see yourself having toxic internal conversations which are negative and unhealthy it's probably time to go
through a spiritual detox and re-wire your internal thinking processes for better decision-making.
-Optimism is an essential element to condition yourself for great success. An entrepreneur cannot have any
tolerance for negativity or passive thinking.
Must-Dos Before Becoming an entrepreneur
1. Educate yourself about finances
 Make a personal budget- “budgeting helps ensure that you’ll have enough money for the things you need and the
things you want, while still building your savings for future goals.”
 Track your spending-see exactly where your money is going and where you may be spending too much
 Plan to pay off debt-Paying off debt may also help you better manage your finances and reduce money-related
anxiety
 Improve your money mindset-Taking on a more positive financial mindset while managing money could include
things like keeping sight of your goals.
 Put sound bookkeeping in place
 Create a cash flow projection
KPIs and Metrics for Financial Management
Profitability
-ability of a company to use its resources to generate revenues in excess of its expenses
*Gross profit margin ((total sales –COGS)/ total sales) x 100)
*Operating profit margin operating income/ revenue *Net profit margin (net profit/ sales) x 100
Efficiency
-how well your company is using its capital and assets to generate revenue
*ROI – investment to profit (net income/ asset) x 100
*WCR – liquidity (current assets/ current liabilities)
*WCT - capital to sales compared to competitor (net annual sales/ ave amt WP)
Solvency-ability to pay its long-term debts
*Operating cash flow ratio (net income + non-cash expenses + changes in working capital) / current liabilities If the
operating cash flow ratio is 2, for instance, it means your company earns $2 for every dollar of liabilities
2. Get out of that employee mentality
3. Learn how to take risk
 Develop a system for assessing risk
 Move past the fear of failure
 Think about the upside of change
 Find ways to take on increment al risk
 Seek out advice from calculated risk-takers
4. Find a profitable business idea
 Does your product serve a passion or solve a problem?
 Is this a fad, long-term, or growing product category?
5. Get your product developed
6. Validate you product
7. Write your business plan
8. Secure the funding you need
9. Launch your business
10. Manage your business and keep learning
11. Take advantage of the technology
12. Don't let technology make you lazy