15 Lessons in Small Business Leadership

eing a small business owner makes you a leader, whether you realized it when you first started your company or not. Leadership can make or break your business. Some people are natural-born leaders, while others may not have the same inclination. The good news is that leadership can be learned, and there’s always room for improvement. Keep reading our 15 Lessons in Small Business Leadership to learn more about what you can do to become a better leader for your company and why it’s important.

Why quality leadership is essential to a small business

Small businesses thrive when small business owners are committed to being leaders. Not only does leadership provide clarity for employees, but it also inspires them to be their best and instills trust. Leaders drive the company in the direction it should go. Without quality leaders, your business is like a rudderless ship without any clear direction.

1. Communicate the company vision

Every business owner should have a vision for their company, but, if you assume your employees know or share that same vision just because they work there, then you are dropping the ball. One of your primary responsibilities as a business owner is to communicate (and over-communicate) your company’s vision until it’s ingrained into everyday life within your workplace. Nobody has the same connection to the company vision as you, so the job falls squarely on you to communicate to all of your employees from managers to support team.

2. Set clear goals

It’s also your role as a business owner to set clear goals for your company. Employees rely on you for guidance, so they know whether they are performing up to the correct standards.  Clear goals remove some of the barriers between business owners, management, and team. Everyone is more likely to hit the mark when everyone is on the same page and moving in the same direction.

3. Listen to your customers

You need customers to have a business, and ignoring the customers you do have is a huge mistake. Create systems to gauge customer interest and get feedback after they make a purchase or interact with your team. Receiving criticism and negative feedback may sting, but it’s something you need to hear if you want to improve your business and enhance your customers’ experience.  Listening to your customers doesn’t mean you have to agree with every suggestion offered. It just means you need to be in tune with the people who support and fund your business.

4. Set the tone

Another role of business owners is to set the tone for the entire company. Company culture is a direct reflection of your leadership (or lack of it). If you’re lazy, your team will be lazy too. If you don’t communicate well, don’t expect your managers to do any better.  If you want to create a positive work environment, it all starts with you and trickles down from there. Think about the kind of work environment you want for your employees and customers, and then work to set a tone that matches that.

5. Encourage employees to take ownership

A leader is someone that cultivates leadership among their team. Allow your employees to grow and use their skills to help the company. Smart leaders understand that they may have blind spots or weaknesses in areas where their employees thrive.  Listen to your employees. Encourage them to share their ideas and solution to problems as they arise. A good idea can come from anywhere, but when it’s from one of your employees, they have a vested interest in helping it grow. If you want to learn more, read about the differences between a leader and a manager here.

6. Lead by example

It’s one thing to lead with words, but the best way to lead your company is by example. Don’t expect your employees to do something you are unwilling to do. You can lead by example by being a hard worker, communicating well, keeping a level head during conflicts, encouraging others, and asking for help. Your employees will be more likely to display those traits when they see you doing it first.

7. Delegate

As a business leader, you can empower your employees by delegating important tasks instead of doing everything yourself. It shows you trust them to handle jobs that are important to you and the company. Also, delegating tasks allows you to focus on what you do best.

8. Treat your employees well

A good lesson for life, not just business, is to treat people well. Your team may spend more time at the office each week than they do with their families, so do your best to honor their time and commitment to the business.  Offer benefits and other job perks that make employees feel valued. Provide a safe, positive work environment that they look forward to coming to every day.

9. Continue to learn

Strive to be a lifelong learner. Leaders know that they can always learn something new, whether it’s learning specific leadership skills (like networking) or doing research into your business industry. Continued learning shouldn’t be limited to just professional growth but should also focus on personal growth and self-improvement.

10. Give feedback

Schedule regular time with your employees to provide feedback on job performance. Your team needs feedback to know whether they are doing a good job or need to improve upon their skills. Without any direction, it's hard for employees to know where they stand.  Frame your talks around the company vision, company goals, and role-specific goals. Feedback can be positive or critical. Either way, you should always provide next steps so they can improve their performance. Also, create two-way communication by allowing your employees to ask questions and bring up any concerns they have about you or the company.

11. Understand your strengths and weaknesses

A good business owner knows their strengths and weaknesses and hires people that complement their skillset, not mirror it. Leverage your strengths to improve your business and hire people that excel in areas you don’t.

12. Be approachable

Being the boss doesn’t mean that your employees should feel like they can’t come to you, especially in a time of need. The last thing you want as a business owner is for your employees to view you as this figurehead that they only see or speak to on occasion, or better yet, make it a point to regularly initiate conversations with your team. Make sure everyone knows that your office is open. Holding open office hours is one way to do this.

13. Invest in your employees

You need customers to stay in business, but your employees are your company’s lifeblood and an extension of you. Invest in your employees as much as possible. Whether it's through benefit packages, special programs, or providing extra resources or a fun work atmosphere, go out of the way for the people who help your business grow.

14. Recognize achievements

Take time to celebrate company and employee achievements no matter how big or small. Your staff will appreciate the recognition and feel valued, especially if it's something they didn’t realize. Every staff win is a win for your company.

15. Build trust

Trust might be one of the most important traits of an effective leader. Trust is something you can’t buy — it has to be earned over time, and it can be ruined in an instant. Keep your promises to employees, stay consistent, and create an environment that cultivates trust and honesty.

Final Thoughts

Every step you take towards becoming a better leader will improve your business. It may not always show up in the company’s bottom line, but leadership, good and bad, will show in other areas of your business. Commit to being the best possible leader and help your staff to become leaders in their roles too. Becoming a leader is hard work, but it’s worth it.    Kevin Payne is a personal finance and travel writer. His work has appeared on websites like Forbes Advisor, Investopedia, Credit Karma, and FinanceBuzz. He is the family travel and budget expert behind FamilyMoneyAdventure.com. Kevin lives in Cleveland, Ohio, with his wife and four kids.