The numbers are staggering; according to the Small Business Administration (SBA), 50 percent of startups will close their doors permanently within five years of launching.
In addition, only 30 percent of new businesses manage to make it to their 10 year anniversaries.
Those are difficult odds to overcome. As a leader of a new business, you have a unique perspective on the challenges your company faces, what your competition is doing and the financial state of your startup.
As the head of the business, it’s up to you to step up as a leader to ensure your company succeeds and defies the odds.
As an entrepreneur, you likely have worked a long time on bringing your ideas to life. But now that you have a functioning business, you need to lead in many different situations.
Studies have shown that the leadership abilities of co-founders and CEOs are directly correlated with startup success.
As a leader, you’ll motivate and inspire your employees, charm and reassure investors, and negotiate with vendors and partners. You have to be able to command respect and authority, or there’s no chance you’ll make it.
While some people are born leaders, it is a skill that can be cultivated. Leaders have many different styles, but they all share many of the same components. Work on these five areas and you’ll be a stronger leader for your team:
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1. Develop Your Vision
Employees don’t typically join a company for the leader; they join because of the company’s unique vision and value. Steve Jobs is one of the most noted examples of the importance of vision. Jobs was noted as a brutal boss, even described as unreasonable, arrogant and fickle. But he was entirely focused on revolutionizing the technology landscape, focusing on elegant designs, intuitive processes and innovation.
His vision transcended any of his shortcomings and allowed him to succeed as a leader. People got behind him and were excited by him, not because he was such a great boss, but because his ideas for the future of the company were compelling. If you are more of an introvert and struggle to connect with people, you can still succeed as a leader if you have a distinct mission.
2. Recognize Your Strengths and Your Weaknesses
Similarly, good leaders know their talents, but more importantly, they know their weaknesses. As an entrepreneur, this can be difficult since you’re used to handling everything on your own and your company is your baby. But it’s essential that you can look at your business from a strategic viewpoint and identify areas where you need to address issues or deficiencies. Really seeing what competitors are doing in comparison to you, and what they do better, is necessary for you to evolve and adapt.
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3. Delegate Intelligently
It can be difficult giving up control when you’re used to calling all the shots. But for your employees to grow and for your startup to thrive, you need to learn to delegate wisely. That means not just giving important tasks to others, but also giving them ownership and the ability to make decisions to keep critical projects moving. If you make them check in with you on every little issue, you’ll slow down the process and make your employees frustrated and resentful.
4. Reward Accomplishments
Your team does want to do a good job. But unfortunately, many bosses assume the worst about their employees or push them too hard. When your staff goes above and beyond, make sure their efforts and achievements are recognized and rewarded. Showing gratitude is a great way to make people happy to follow you. One effective way to do this is to incorporate employee benefits that you previously did not have, such as student loan repayment assistance.
5. Truly Listen
As the leader and founder of your business, you may think you know all the ins and outs of the business. However, you hired your staff for a reason, and they have valuable experiences and insights that can improve efficiencies, increase productivity, and impact your company’s bottom line. Actively encourage feedback and suggestions. Your staff may have a different perspective than you, and it’s important to take that into consideration to ensure your business stays relevant.
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As an entrepreneur, it can be difficult to tackle all of these areas at once and still be successful. These five areas are critical to being an effective leader. Without strong leadership, your business will join the 50 percent that collapse. Instead, consider yourself a work in progress and proactively strive to improve. By working on how you approach your team, how you delegate and how you reward employees, you can lead your startup to success.