Updated: Oct 10, 2019
Do you have what it takes to be an entrepreneur? You might have a solid idea for a new product or service, and maybe even a strong business plan to back it up, but if you want your startup to have a chance at long-term success, you also need to have the leadership qualities necessary to take your vision from dream to reality.
Leaders serve multiple roles. The best leaders motivate, act as role models, and serve as figureheads for their companies. You don’t have to have employees to be a leader. Leadership qualities help home business owners deal with contractors, customers, clients, and the general marketplace.
Most leadership qualities can’t be measured, captured, or reviewed concretely. In other words, we can’t say a business leader "scored 98 in leadership." The best we can do is look to anecdotal examples or psychological studies to see which qualities are commonly possessed by good leaders.
An Eye Toward the Future
A successful leader will always have one eye looking toward the future, if not both eyes. They think several steps ahead on every problem and always look for new growth opportunities. This future-focused mentality is useful for multiple reasons. For starters, it limits the temptation for instant gratification—rather than taking the easier or shorter route, these entrepreneurs are willing to make sacrifices for a brighter long-term future. They’re also more inclined to apply long-term fixes to problems, rather than relying on patchwork fixes, which are often unstable and unsustainable. For example, Amazon founder Jeff Bezos is notorious for continually reinvesting in the company, ignoring short-term profitability in favor of long-term growth channels.
Good leaders also project self-confidence. People who appear confident attract others and exude a sense of security. Confidence will help you win clients, customers, and joint ventures. You'll have an easier time convincing investors that you're worth the investment. Plus, there’s objective evidence to suggest that confident people make better entrepreneurs. One study in Applied Psychology found that successful entrepreneurs showed significantly higher levels of confidence than entrepreneurial students and students not interested in business.
Ask any successful leader to tell you the top 10 concepts that helped them succeed, and there’s a good chance they’ll mention communication. Billionaire Richard Branson, for example, describes communication as the “most important skill any leader can possess.” Communication is an important skill because it has the power to enhance all your other skills. You’ll need communication skills to make sales, to rally the team, to resolve issues, to negotiate deals, to recover from PR disasters, and to make pitches to media or investors.
Speaking, knowing your audience, and choosing your words carefully can avoid miscommunications, which ultimately save you time and money.
While most of these traits focus on how entrepreneurs engage with their surroundings, it’s also important to note how strong leaders take care of themselves. If you develop insomnia and make unhealthy eating choices, for example, your productivity is going to suffer, and you won’t be able to lead as effectively. The best entrepreneurial leaders understand that the health of their bodies and minds are crucial to success. They’re willing to spend a few extra hours each day getting enough sleep, eating the right foods, exercising, and reading new materials.
Many successful entrepreneurs use a morning routine to feel centered and to set the right mindset for the day.
Some of the biggest startup successes in the world were only possible because their founders were willing to pivot. For example, it’s hard to believe now, but YouTube originally started as a dating site. If it had stuck with dating services alone, it probably wouldn't be the household name that it is today, but it adapted and achieved success. No matter how much you research your business idea, or how sure you are that it’s going to be successful,
unforeseen developments and market changes can compromise your chances of success.
You need to be able to adapt on the fly, sometimes with big adjustments to your business plan. If you cling too tightly to old ideas, you may not be able to survive. You could achieve this by using the principles of adaptive leadership in the workplace.
Successful leaders aren’t afraid to take risks, as long as they’ve calculated the odds of success and are comfortable with those odds. Starting a business is a risk, so naturally, entrepreneurs have an inherent tolerance for risk. That can be a good thing, so long as it's carefully managed, because it can allow you to do things "safer" entrepreneurs won’t do. That can help set you apart, and if the risk pays off, you'll be better positioned for success. Of course, that doesn’t mean you should take more risks for the sake of doing something risky. Assessing risks and having the courage to take a calculated risk is part of successful leadership.
Education and Continual Learning
Bill Gates and Steve Jobs famously dropped out of college to start their businesses, but that doesn’t mean they gave up learning. A study from the Kauffman Foundation indicates that 95.1% of founders have at least the educational equivalent of a bachelor’s degree, and 47% had even more advanced degrees. Like it or not, many of the greatest leaders throughout history, in business and other fields, have been formally educated. Those extra years of learning equip you with the skills and knowledge you need to make better decisions and give you diverse experiences that help make you a well-rounded individual. However, learning isn’t just done on college campuses. Leaders are also readers. They listen to podcasts. They're continually learning about their industry, whether it's new marketing strategies, technological developments, or another aspect of the business. Good leaders feel compelled to keep up on trends and to stay relevant.
As a leader, one of your biggest responsibilities is going to be that of a decision-maker. You won’t always make the “right” decisions, and sometimes there won’t be a “right” decision to make. But when a decision needs to be made, you’ll be the one who makes it, and you'll be the one to experience the results and be held accountable for them. If you procrastinate on decision-making, or if you tend to defer hard decisions to other people, you won’t perform well when stressful situations demand immediate action.
Being passionate is another essential trait for leaders. When you look at successful leaders and entrepreneurs, there is no doubt they’re passionate about what they’re doing. Your energy and enthusiasm as a leader will fuel your efforts, and your employees, partners, and customers will take notice. Passion is contagious, so if you’re naturally enthused about your business, the people around you probably will be too. Also, passion tends to translate into charisma for many leaders, which helps them achieve greater visibility in the media. All this is without mentioning that building a business based on what you’re passionate about is just more fun than building a business based on monetary opportunities alone.
The qualities mentioned above aren't guaranteed to make someone a good leader. Someone demonstrates potential by possessing those qualities, but every business is different, and successful leaders know how to gauge variable factors to achieve the most in their situation.
Leadership styles: There are different types of leadership, and no single approach is the “correct” one. Much depends on what your employees expect, the culture you’re trying to build, and how you work best. For example, some companies perform extraordinarily well with a boss who’s demanding and refuses to be told "no." Others perform better with a boss who’s eager to compromise and let employees flourish on their own.
Industry quirks: As you develop your leadership skills, consider the industry you’re trying to break into, and the size of your business. A law firm, for example, will require a leader who’s stern and speaks formally, while a company that makes video games for children will require a leader who’s more playful and laid-back. Big corporations need leaders who distance themselves from the majority of workers and take care of business, while small businesses tend to do better with ground-level oversight and interaction.
Changing environments: Leaders should also factor in changing trends and perspectives on leadership. For example, a few decades ago, it was nearly unthinkable for the CEO or boss to walk into a meeting wearing jeans and a hoodie, Today, Facebook's Mark Zuckerberg and his Silicon Valley peers have made it fashionable, presumably to alleviate decision fatigue.
Nothing's Set in Stone
If you don’t fit the mold of a leader as outlined above, you might feel like it’s impossible to build a successful business. However, the real takeaway here shouldn’t be an evaluation of whether or not you’re currently fit for leadership, or even which qualities you need develop to become a leader. Instead, you should use this information as a guide to determine your strengths and weaknesses. All leaders have weaknesses, but successful leaders work on improving those weaknesses while leveraging their strengths to overcome them. Any particularly significant weaknesses could be offset by a strong partner, employee, or mentor.