Why good leadership is a must for small businesses
Growing your business might seem a daunting task when you oversee every aspect of your business. Regardless of whether you are just starting out or have some experience, managing your business has many challenges. This explains why roughly half of small businesses close their doors by the fifth year. How you deal with these challenges defines you as a business leader and your attitude toward them can have a great impact on your business’s success and survival!
Effective leaders invest time and energy, whether consciously or subconsciously, to develop skills that empower them to mobilise others. As parts of the business evolve, leaders are required to develop new skills, acquire extra knowledge and switch their focuses to ensure they’re steering the ship effectively.
“Before you are a leader, success is about growing yourself. When you become a leader, success is about growing others.” Jack Welch, Ex CEO, General Electric.
Skills you need to grow your business are not the same as the skills you needed to launch it. Don’t overestimate your own abilities. You may need training to learn the skills and attitudes required to lead growth. Somewhere along the line, you’ll also reach a point where you may need help from others to meet the needs of your customers.
In this blog, we’ll provide you with useful tips on how to cultivate business leadership skills that are required to effectively manage your small business.
Why Do Small Businesses Need Great Leadership?
Here are just a few reasons why good leadership is a must for small businesses:
- To give direction to a business– Giving direction to everyone involved with the business helps them strive better towards their daily goals.
- To establish a culture for the business– All businesses work on different ideologies – some may be more laid back, while some may be strict. It is the role of a leader to set such rules and create an amiable culture in the organisation.
- To keep company cohesiveness intact– Everyone needs to be working towards a collective goal, especially in a small business. To be an effective leader, you must work closely with your team, listen to them when they talk, encourage innovative ideas, and let each member of your team learn in the process.
Key leadership personality traits
A leader is a person that has the gift of motivating others by setting themselves up as an example for everyone to see, be inspired by and follow. Being a good leader is crucial in helping you unlock your staff’s potential and increasing productivity. But it just doesn’t happen overnight — it comes from a dedication to your staff and a desire to see them succeed.
So, what can you do to develop your leadership skills and keep your team learning and growing? Check out our tips for improving your leadership skills.
1. Lead with passion and vision
As a business owner, the chances are you’re either passionate about what you do or why you do it. Instilling that same passion within your workforce, however — that can be a little trickier.
In the long-standing debate between managers vs. leaders, a strategic mindset is a quality that separates them. What this means is having not only a vision for your company but also the determination to work towards realising it. Great leaders don’t get distracted by minor details on the way to achieving their goals. They are constantly asking themselves “what’s the next move that will get the company in a better place?”
It takes great business leadership skills to communicate that vision properly to other members of the company, whether peers or subordinates. By showing your passion for the long-term you can motivate them in their daily tasks.
2. Effectively delegate to share the burden
To grow your business, you will need to learn to delegate properly. This means trusting your management team and giving up day-to-day control of every detail. You could stifle creativity and motivation by interfering too much. As the business becomes more complex, you also need to develop your time management skills and learn to focus on what’s really important.
As your growth progresses, you may also need to bring in outsiders to help. You’ll want to delegate responsibility for particular areas to different specialists. You could consider recruiting company directors. As you start tackling a new opportunity, someone who has experience of that activity can be vital. For many successful entrepreneurs, learning to listen to and take advice can be a challenge. But it may also be essential if you are going to make the most of your opportunities.
3. Communicate and listen effectively
Communication is crucial to the success of a business. To lead, you need to possess the ability to articulate your opinion clearly and leave no room for misunderstandings. The art of communication plays a huge role in building trust among employees and across management levels. Businesses with effective communication practices are over 50% more likely to have better employee retention.
To improve your communication process, start by introducing one-on-one sessions with your team, where you listen to their concerns and agree on plans to action these issues. This open line of communication will make your team feel valued, and could help increase their motivation. It’s also important to recognise contributions and achievements, as well as providing support — this positive encouragement can go a long way in raising productivity and boosting employee morale
4. Embrace Change
Change in the economic environment is constant and among the key leadership skills, adaptation is high on the scale. The ability to perceive change, manage it, and help others adapt is a vital leadership skill for your company’s well-being.
Business leadership skills for business owners also include implementing those changes smoothly, without disturbing the organisation’s balances and overcoming resistance. Adaptation combined with communication skills enables a leader to pass on the vision of change and inspire others to willingly follow.
5. Foster innovation and creativity
Innovation and ideas are two central components that keep your business growing and expanding. However, they don’t always have to come from your own mind.
As the ones working and communicating with your clients and suppliers most frequently, your employees are well-placed to come up with those new techniques and processes that could increase your efficiency. Draw those ideas from them by fostering an environment that encourages, and rewards, creativity and innovation. Look for ways to adopt and adapt those ideas into your business. Not every suggestion will be a winner, but you’re sure to find a few diamonds in the rough that might improve your business in ways you might not have previously considered.
6. Honesty is the best policy
Among the characteristics of a leader, being true to yourself and others is important to lead. Honesty is among the key leadership skills for business owners. It allows a person to quickly gain the trust of their peers and subordinates.
Gaining trust is the cornerstone of gaining other people’s respect. So when it comes to giving negative or positive feedback, employees will take it into account and be motivated.
7. Never stop learning
A great leader is aware that learning is a lifelong process; this is the reason why they’re constantly seeking opportunities to educate and improve themselves. Moreover, a leader always recognises that sometimes other people are more knowledgeable than them in certain topics.
A true leader also promotes a learning environment so that everyone has the opportunity to grow personally in their business. If you’re thinking about changing the products or services you offer, you may need to retrain workers. This means giving them the necessary skills for any new processes or tasks they’ll have to do.
Investment in employee development increases their engagement with the business and tends to increase productivity, job satisfaction and staff retention. It may also help ease any concerns they have about change. This gives them confidence that you are continuing to invest in them and in the business.
8. Making sure you hire the right staff
One of the qualities of a great leader is that they hire employees that will fill expertise gaps inside the organisation.
“Ultimately, it’s on the company leaders to set the tone. Not only the CEO, but the leaders across the company. If you select them so carefully that they then hire the right people, it’s a nice self-fulfilling prophecy”. Tim Cook, CEO, Apple.
The hiring process and selection in a small business scenario should be effective. As a good leader, you should possess the proper interview skills to hire the right group of people for the job. You should come to the interview with a clear understanding of the skillset and character type while looking for that perfect candidate.
Get help to build your leadership potential
Managing a small business requires a lot of strength and skills because they are the most important deciding factor to drive a business to success. The strength and skills of small business leaders are a determining factor that sets a stage for the success of a business.
Continuing to learn new leadership techniques and innovative methods for conducting business is the key to adaptation, flexibility, right decision making, and can improve small business growth opportunities.
The good news is that anyone who has the willingness and ability to lead from the front can learn to become a good leader and the Growth Hub has a new programme designed to do just that! By enrolling on the new Community Renewal Fund Programme for start-ups and existing microbusinesses, we will equip you, not only with the marketing and financial skills you need to start or grow your business, but with the interpersonal skills you need to improve your leadership potential.
By attending workshops and through 121 coaching with our business advisors, we can help you build your leadership techniques to steer your business to success. With free access to our interactive learning portals, you can access a variety of information, guides and help on leadership, management, recruitment and more.
Our new support programme is completely free, and you may be eligible if you are an entrepreneur considering starting a business; or have already started, but been trading for up to 3 years and less than 3 (FTE) staff, and in Peterborough, Huntingdonshire or Fenland local authority areas.
Act now to maximise your chance for support since our free support programme will be available for 6 months (ending June 22).