Small Business Leadership


Leadership in the old sense used to refer to a position of power, but now it is generally agreed as a type of behavior. People are leaders not simply because of the job title they hold but more about what they do. While the leaders of any business face many problems in common, as a small business owner you need to be aware of some particular issues that can have an effect on the success you achieve for your business.

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Every business needs someone to set a direction by developing a vision or a mission with a strategy to achieve its goals. To do so it must motivate its staff to act in the best interests of the business. But small businesses tend to have limited resources, so often can’t motivate people simply by offering more money or promoting them. Instead they have to inspire people with the vision for the future success of the business. Finding ways to make the vision seem within reach can help with motivation and commitment.


To motivate people in non-monetary ways you need to know their values and what excites them. As a small business owner, you need to invest the time and energy to get to know your employees well, and the more you know them, the more you will be able to meet their needs in non-monetary ways.

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In most small businesses, there is very little gap between the leader and the team. The boss is not someone who they only see rarely, as they are usually on site regularly. One of the challenges is because there are few, if any layers of management to insulate the owner from employees, those at the top need to be seen to lead well. Being highly accessible offers the chance to influence many people in a short period of time, but it can also magnify leadership inadequacy.


As the number of employees is usually small in number, they usually interact closely, and so everyone will be affected by how they see their colleagues being treated. If you treat an employee in a small business badly, other people are likely to feel that they have been treated badly as well.


Similarly, the tight social networks that form in small businesses cause people to spend a lot of time thinking about what is really going on at work. There are few secrets in a small business. This has an implication for leadership: you should spend extra time to ensure that the most influential people are on board with anything you do. If they are, they will influence the others. To achieve this requires you to know your employees well and the nature of the relationships between them as well.

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Leadership is not simply about doing the right things, it’s about doing things right, particularly when you are facing difficult circumstances. Current economic conditions have forced many small business leaders to make tough choices. How you behave at these times directly influences how willing your employees are to support the decisions you make.


Spending time explaining why cuts are necessary, addressing people’s concerns, and expressing empathy for the difficulties they may face has been shown to have a positive effect. During tough times you may feel you just don’t have the time to get it right, however, the proven benefits of getting leadership right, particularly when making the tough decisions, suggest you don’t have the time to get it wrong.


Equally, it can be tough to make yourself psychologically available to your employees. Feeling under pressure from challenging circumstances, you may feel like lying low and avoiding people who are in need of care, concern and communication. Avoiding this temptation is something that a good leader has to do.


Leading a business is more than simply owning it or running it. It’s a quality you can always improve in yourself, and it enhances the success of your business.


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