Don’t overlook the value of growing leadership skills just because you are a solopreneur or have a small team. Because leadership is not only for high-powered CEOs. Though your business may not be posting annual revenue in the 7-figures, you are still a leader. Essentially, leadership is communication, engagement, and authority. And these are important no matter what sector or size of your business. Here we’ll list the top 6 leadership skills for small business owners.
What is Leadership?
For entrepreneurs, the best definition of leadership may be from Gary Yukl, author of Leadership of Organizations. He wrote “leadership is the process of influencing others to understand and agree about what needs to be done and how to do it, and the process of facilitating individual and collective efforts to accomplish shared objectives”
Well, that says it all, doesn’t it?
Because owning a small business means aligning lots of moving parts to create and operate your vision. There are suppliers, staff, customers, sub-contractors, banks, government, technology – so many parts to communicate to and coordinate with.
This explains what leadership is. But HOW to make that happen?
For that, let’s get into the top 6 leadership skills for a small business owner
6 Leadership Skills for Small Business Owners
The list of what makes a good leader in business could actually be very long, if you start to break skills down into small pieces. With these 6 skills, small business owners will have a strong foundation for effective leadership to successfully start, manage, and grow their venture.
1. Emotional Intelligence
The first leadership skill is EI, or emotional intelligence. Also known as emotional quotient, or EQ.
This is often described as the capacity to perceive, interpret, and manage emotions.
Basically, it’s being able to read people. And read a room. As in, sensing when a customer or employee is upset about something. Or when someone is lying, or telling the truth.
But EI isn’t just about a well developed ability to perceive emotions and moods in other people. It also means being able to regulate your own emotions. As an example, imagine you are worried about something. And let’s face it, entrepreneurs are always dealing with challenges! Having emotional intelligence allows you to compartmentalize that feeling during working hours to be the same level of pleasant and professional as you are any other day. Which is much better for business than being distracted, grumpy, and short tempered.
Essentially, emotional intelligence allows for empathy. These are important leadership skills for small business owners because it contributes to building trust and establishing positive working relationships.
After all, anyone who has ever had a moody boss with zero ability to read the room knows this is not the kind of person you want to work hard for.
2. Decisiveness
Running a business requires making countless decisions. From upgrading technology, to selecting a new bookkeeper, to hiring options, entrepreneurs need to make choices.
Therefore, being able to process information and make solid decisions is necessary for moving the business along. Without being decisive, important projects and situations will stall. So being decisive is part of being a good leader.
Another important aspect of decisiveness is that it builds credibility. Just imagine a small business owner changing her mind all the time. On Monday, the decision is to do XYZ. By Wednesday, that is cancelled because ABC is the better choice. Then a week later it’s back to XYZ again. As a result, no one really believes anything she says, because it will all change in a matter of days.
Not only does that negatively impact effective operations, it is very damaging to morale. And it limits the ability of the entrepreneur to lead. Because when a new policy or procedure is introduced, it may be ignored by the team. After all, why bother learning this new thing when it may be cancelled soon?
Clearly, being decisive is an important skill for small business owners.

3. Clear Communication
Clear communication is necessary for leadership because otherwise, important information gets lost in translation. Which leads to errors. Mistakes. Or worse, conflict and disagreements.
And communication goes both ways. It is not only clearly expressing your vision and expectations. It is also being an active listener, with the ability to understand what people are saying to you.
Also, being open to what people are saying to you. So that you better understand the needs and issues of your customers and team. And because being open to hearing feedback and opposing ideas is valuable for making improvements or avoiding mistakes.
Another aspect of clear communication is being aware of bias. Internal biases have a huge impact on how you process information and communicate.
For example, assuming an individual doesn’t know something because of where they went to school. Or refusing to hear a pitch because of something negative you once read about the company online. Essentially, internal biases can create barriers to clear communication.

4. Self Awareness
Self-awareness is on this list of leadership skills for small business owners because it is such an important foundation for the other skills. Without self-awareness, a person isn’t open to learning and developing their skills and competencies.
Furthermore, self-awareness allows a small business owner to understand what they do well, and what their weaknesses are. Which allows for growth. And also, it leads to better management decisions and effective delegation. Even solopreneurs usually get help, like a bookkeeper, social media manager, or website designer.
No one is an expert in everything. And while having a broad range of skills and knowledge is an advantage for entrepreneurs, there is a time to delegate.
As the great Lucille Ball said, “Knowing what you cannot do is more important than knowing what you can do.”
5. Strategic Thinking
Strategic thinking is a key leadership skill because it allows the entrepreneur to align decisions and actions with the bigger picture. It’s the ability to rise above the day to day operations of a business to see things long term.
For example, one person on the team doesn’t like a recent change. Perhaps it’s new software or a different process. They want to keep doing it the new way. A poor leader may rationalize why that’s ok. For example, saying:
- “He is such a hard worker”
- Our biggest customer really likes her”
- They’ve been working for me since the beginning”
- “It doesn’t matter if we bend the rules a little for her”
A strategic thinker sees beyond the short term needs of one individual and prioritizes the long term needs of the business.
Additionally, strategic thinkers are aware of trends, analyze risk, and make plans for staying competitive and growing the business.
Therefore, being strategic is an important leadership skill for small business owners.

6. Creativity and Flexibility
By nature, entrepreneurs tend to be very creative. After all, identifying a need or having an idea for a product or service requires imagination. Being creative and flexible are important leadership skills for small business owners.
Why?
Because as Ferris Bueller said, life moves pretty fast. This is especially true in business. Market conditions change. New laws and regulations are introduced. Competition increases. Strikes happen. There are so many variables and influences on a business. So being creative and flexible helps entrepreneurs be effective leaders. To learn, adapt, pivot, and readjust strategies and tactics.
Also, it’s flexibility which allows a leader to find the positives in the midst of challenges. To keep up the morale of the team when there are problems. Continue to engage them when a business shifts course to adapt to changing conditions. This is why creativity and flexibility are key leadership skills for entrepreneurs.
Conclusion
Entrepreneurs need good leadership skills to effectively start, manage, and grow their business. This is true for solopreneurs as well as for founders leading teams with dozens of people. Because every business owner needs to interact, engage, and communicate. Lacking these 6 leadership skills for a small business owner can lead to misunderstandings, conflict, and mistakes.