How to become a business leader

Founding a startup or launching a small business doesn’t automatically make you a leader, but owning a company does create a clear opportunity for you to take charge. After all, a business without a leader isn’t likely to go very far. Take a closer look at effective leadership styles and learn how to become a business leader.

Look around your shared office space, and you’re bound to see a range of personality types and management styles. While there’s no clear-cut best way to run a business, there are a few standard management styles that take precedence in most companies.

  • Authoritative: Under this type of leadership, the top executive tends to thrive while retaining control over virtually all company actions. Authoritative managers typically make decisions without input from other supervisors or employees and expect policy implementation with little discussion.
  • Collaborative: Nearly the opposite of authoritative managers, collaborative or democratic leaders strive to work closely with supervisors and employees alike. They aim to involve the whole team and generate a sense of belonging, and they often strive to create emotional bonds among team members. Though they ask for participation from the entire team, democratic leaders take ultimate responsibility for company decisions.
  • Transactional: While some managers offer employees ample flexibility to make decisions, transactional leaders establish a strict system of tasks and outcomes. This leadership style tends to work well for strong leaders who have clear visions and want to create well-defined outcomes for their companies.
  • Instructive: These leaders manage companies while coaching fellow supervisors to take on leadership positions. Instructive managers actively involve others in their decision-making processes in order to lead by example and to hone the next generation of trailblazers.
  • Transformational: Some leaders are charged with more than just managing a company. Transformational leaders initiate substantial change within an organization by empowering team members to do more than their positions call for. Effective transformational leaders are known for producing devoted employees and taking companies in completely new directions.

How to become a better business leader

Following the path from small business owner to company leader isn’t always easy, especially if you’ve never navigated it before. Follow these steps to become a better business leader:

  • Choose a leadership style: Your colleagues and team members need to know how to work with you to accomplish goals and meet objectives. Adopt one of the above leadership styles to help your team better understand how you see your role unfolding.
  • Know your industry: As a startup founder, you need to know your industry well. Take the time to understand who the major players are, what the market projections are like, and how your company fits into the mix. Without substantial knowledge of your industry, it’s unlikely that you can to lead your company in a successful direction.
  • Be open to advice: Being the boss doesn’t mean you’re all-knowing. To lead your company effectively, it’s in your best interest to develop a circle of confidants and accept counsel from those you trust. After all, other experienced executives in your industry are bound to have valuable knowledge to share.
  • Show confidence: Just because you’re willing to listen to advice doesn’t mean you have to second guess your decisions. The best managers demonstrate confidence when they make business decisions. Because they’ve weighed their options, they understand the potential outcomes, and they’re prepared to move forward.
  • Develop a vision: It’s virtually impossible to manage a company without a vision. Create a vision statement to clarify large-scale-direction and long-term goals. Rather than keeping it to yourself, share it with your team to keep everyone on track.

Qualities of business leaders

To excel at their jobs and run their companies effectively, top business owners tend to have a few key characteristics. To ensure that your time at the top is successful, hone these 10 qualities.

Communication skills

One of the most important qualities of business leaders is communication. Whether you’re presiding over a meeting, composing an email, or making a quick phone call, you need to communicate your ideas and requirements clearly.

While you may prefer one mode of communication over the others, you should do your best at mastering them all to make sure you don’t miss any critical cues. In addition, the best business leaders also understand that communication is a two-way street. That means they know how to listen and read carefully, too.

Interpersonal skills

Running a business is rarely a solo endeavor. To accomplish your goals, you need to create the best possible team, network with others in your industry, seek out trustworthy vendors, and build a reliable client base.

All of these things rely on developing and maintaining mutually beneficial relationships. To build effective relationships, you’ll need strong interpersonal skills. Use these to make genuine connections, and you’ll be on your way to creating an unbreakable team, network, and customer base.


When you run a startup, the distractions can seem overwhelming. From hiring the right people and developing a groundbreaking product to protecting your intellectual property (IP) and securing funding, your to-do list could be endless.

That’s why all great business leaders must hone their abilities to focus. While you may not want to block out every question, problem, or offer that you encounter, you do need to know what’s worthy of your time and attention. Make sure to focus on what’s important and keep your eyes on the prize.


Successful business leaders have a knack for making decisions that keep their companies moving forward. To do this, they typically consider all sides of a situation and map out the potential outcomes.

Once they’ve done this, they make a decision and stick with it. Poor managers may suffer from indecision or waffling between choices, but good leaders are decisive.


Running a business presents countless ups and downs, but good business leaders don’t allow themselves to focus on the negative aspects. Instead, they have the ability to find the positive side in any situation.

The best leaders know that focusing on the positives is about more than just being cheerful in the face of adversity. Maintaining a sense of optimism encourages your team to do the same, which can help them analyze and resolve problems much more quickly and effectively.

Ability to motivate

Startup founders know all too well that building a business requires years of hard work. You need a strong team behind you to realize your goals, but you can’t always expect them to be as driven as you are.

Instead, you need the ability to motivate your team. Hone your talent for inspiring passion and demonstrating drive, and you’ll pass that motivation on to your team.


Few startup founders and small-business owners do things by the book or follow traditional plans. Instead, they thrive on innovation and doing things differently.

The best business leaders use their creativity to their advantage. They create positive corporate cultures, build cutting-edge products, and inspire innovation. They also encourage creativity in the workplace because they know that thinking outside of the box can lead to exciting breakthroughs and unexpected advances.


When you’re in charge, it’s easy to take credit for the successes while passing off the failures on other members of the team. However, true business leaders know that it’s their responsibility to take credit for both.

Great leaders thrive on honesty and accountability, and they hold their team members to the same standards. Being accountable enables leaders to set strong examples and build trust among team members and investors alike.

Ability to delegate

As an executive, you know you can’t tackle everything on your plate. At the same time, you can’t simply put off tasks or avoid responsibilities until it’s too late.

That’s why the best leaders have the ability to delegate. Doing this enables executives to step back and focus on high-reaching goals while allowing team members to handle lesser tasks and take on junior leadership roles.

Forward thinking

Building a business requires you to set goals and develop plans to achieve your objectives. True leaders tend to focus on long-term goals, using their vision and intuition to guide their actions. The best executives hire employees not for who they currently are, but for how they’ll be able to provide value after a few more years of experience.

Now that you know how to become a leader, put your knowledge to work. Startup founders and small-business owners alike can benefit from choosing one of these effective management styles and honing these leadership qualities as they build successful companies.

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