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BFS Capital Blog

Five Traits of Effective Small Business Leaders

April 11, 2017

Take a quick glance at any non-fiction best-seller list, and you’ll see at least three books with titles like “The Last Book That Ever Needs to be Written on Business Leadership.” Often followed by “The Last Book That Ever Needs to be Written on Business Leadership, Volume 2” with an associated three-day seminar.

Learning how to be a business leader has become big business unto itself. But, really, it’s not that complicated. Master a handful of crucial traits and you can save yourself hundreds of dollars on how-to books, and thousands of hours of reading them. Here are five traits you absolutely must have to be an effective business leader.
Innovation and Adaptability

These might seem like terms that aren’t really the same attribute. But people who are innovative understand how markets and products change, and find ways of addressing new needs. And that means having the flexibility to do that within your own business.

People who see widespread solutions to common needs are, if nothing else, those who have the vision to create a business that can take off. But the ability to see the shortcomings in the current market aren’t enough. Great business leaders see how the world changes, and stay one step ahead of it. Your business might be doing fantastic numbers, but a year from now technology, competition, and market demand might be completely different. And the ability to be flexible and see how your business might need to fundamentally change – rather that rest on its success – will determine how long you last into the future.
People Skills

The old cliché “it’s not what you know, it’s who you know,” is a cliché for a reason: it’s painfully true. Relationships are the cornerstone of any industry, and if you as a business leader aren’t able to attract people to yourself, it’ll be even harder to attract them to your business. That doesn’t mean you need to be the most charming, gregarious person at every Chamber meeting and networking event, but it does mean that you have to be someone that people enjoy talking to.

But being good with people means more than just small talk at cocktail parties. The ability to forge relationships requires making an effort to spend time with and help people who may be of no benefit to you at all.

People skills also mean knowing when to shut up, and when to let people be wrong. There are people in business who are convinced they know everything about everything, and will never miss a chance to tell you. And like it or not, you will sometimes need those people. A good business leader knows when to just let those people talk – perhaps incorrectly – and let the world sort out who’s right. Big egos never like being told they’re wrong, and you are infinitely more likeable when you let them go ahead and do it.

The ability to communicate is crucial to be a business leader; you probably wouldn’t have gotten your business off the ground if you couldn’t at least demonstrate why it was a good idea. But more important than the ability to show other people what you know is the ability to absorb information from others.

Being a good listener is a highly-undervalued skill. Leaders, especially in business, are prone to doing a lot of the talking, and waiting for other people to finish talking so they can continue. But many times your employees, peers, family, and fellow business owners have great insight into how to better your business, and taking the time to ask questions and learn will only make you better.

It’s not enough to only listen to people who you perceive to have benefit either. When employees feel listened to, they work with more motivation. So, take the time to listen to their suggestions and feedback. At worst, you’ll make them feel like part of the process. At best, you’ll get some perspective that you didn’t have.
A Nose for Talent

David Ogilvy – the famous ad man – once said, “If you ever find a man who is better than you are, hire him.” And that ability to spot people who are going to make your business better is one of the most important attributes in a small business leader. Because delegation is such an important part of leadership at this level, having the right people to delegate to is crucial to your success.

This also means knowing where to find talent. Steve Jobs used to guest lecture on college campuses around the country just so he could find bright, up-and-coming stars to bring to Apple. And while you may not be a sought-after guest speaker just yet, having a sense for where to find the best people for your industry is an invaluable skill.

Beyond just knowing where to find talent, you must also know what talents will best complement yours. This means knowing your weaknesses. If you’re not a detail person, find talent who’s big into detail. If you do numbers but can’t talk in public, find someone who’s a dynamite public speaker. Smart hiring means smart hiring for YOU, not in general. So the most qualified candidate might not be the best fit, and recognizing this is both art and skill.

Yes, it is an eye-rollingly overused term; a ubiquitous word job applicants throw around like “team-player” and “goal-oriented.” But in this situation, it encompasses a few traits that are key to small business leadership. First, you must inherently love whatever your business is doing. So if you don’t find the world of commercial real estate fascinating but are just getting into it to make a few bucks, you’ll fail. Your apathy will shine through, and you’ll attract equally mercenary employees.

You must also have intense focus on your business, sometimes to the detriment of other things in your life. The only way to have that focus is if you enjoy it. And the only way to enjoy anything that much is to be passionate about it.

Finally, you must be dedicated to your business, even when others doubt your success. Perhaps it is a little bit of delusion, but if you don’t believe your business will work nobody else will. And the only way to have that much faith in anything is an unyielding passion.

Are there other traits one needs to be a great leader? Of course there are, otherwise there wouldn’t be 15 books on the best seller list every week teaching you all about it. But lack any one of these five, and it’s going to take a lot more than reading to make you a first-rate business leader. And if you’ve found any that you think could use improvement, it’s never too late to get better.