Is Everyone Cut Out To Be a Business Owner? Skills and Characteristics for Those Who Are

Everyone has dreams of running their own company and being their own boss, but the truth is that starting a company is a difficult endeavor that requires specific traits and skills. According to data from the Bureau of Labor Statistics, just around a third (34.7%) of companies established in 2013 remained in business a decade later. This includes businesses across industries, all of which saw a relatively similar trajectory of success over time.

Having a vision is important, but to be successful, a business owner needs to have qualities that not everyone possesses. This includes an understanding of the tactical aspects of running a business, as well as less tangible traits like empathy and flexibility.

Characteristics of Successful Business Owners

Though there are many factors that contribute to a business’s success, there are some observable commonalities. For instance, successful business owners often exhibit some common traits and characteristics that help overcome some of the challenges that entrepreneurship poses. Some of these include:

• Flexibility: Operating a business is a series of challenges that can change from day to day or even minute to minute. A company’s goals often change as markets shift due to pressure from competition and evolving consumer needs. Business owners need to remain flexible to adapt to these changes. For example, you might shift to an online sales model to adapt to decreased in-person business.
• Self-motivation: As the owner of the company, it’s important to understand your role in its continued success. Just as the company wouldn’t exist if you hadn’t decided to start it, you’re also very likely the person most integral to (and likely most interested in) its continued success. For that reason, it’s necessary to be able to find motivation from within, rather than being directly spurred on by some external source.
• Empathy: Being able to connect with employees, customers, and business partners builds stronger relationships, as well as trust and loyalty. For instance, an empathetic leader may implement practices like flexible work hours to help promote a healthy work-life balance.
• Resilience: Running a business can present many setbacks and hardships. A resilient leader can help to bounce back from these challenges. They’ll most likely also be able to make use of lessons learned to avoid similar difficulties in the future.
• Confidence: Being decisive and acting with conviction can help avoid wasting unnecessary time on minutiae, and it can inspire trust from partners and employees. If it’s apparent that a business owner has no confidence in their decisions and direction, it can have an impact on morale and make it more difficult for leaders to make effective pitches and secure funding.

Possessing and cultivating these traits can be a crucial factor in your ability to successfully run a business. It’s also important to stay informed on business and finance topics to strive for continued growth and find success.

Skills of Successful Business Owners

Along with valuable personality traits, successful operation requires some skills more directly related to actually running a business. Successful business owners should possess skills such as:

• Communication skills: Whether to employees, customers, investors, or other stakeholders, it’s important to be able to clearly express an idea. This includes general skills like strong oration and clear writing, as well as more specific skills like conducting a productive meeting or crafting an effective pitch deck.
• Creativity: Creativity can inform everything from workplace culture to business direction. A creative approach to solving a problem can be the difference between successfully and unsuccessfully obtaining funding, especially in competitive markets.
• Organization: Running a business involves many moving parts, and keeping track of all of it requires the ability to stay organized.

These skills have some obvious importance but they’re also vital in ways that may not be immediately apparent. As such, these skills are useful in an official business capacity, as well as in interpersonal relationships in the workplace.

Common Mistakes in Starting a Business

Creating a business from the ground up is a large endeavor. Without proper care, entrepreneurs can make errors that jeopardize their future success and longevity. Some common errors new business owners make include:

• Not making a business plan: Starting a business without a business plan results in a company with no clear direction, which can pose unnecessary challenges.
• Choosing the wrong business partners: Deciding to partner with someone who doesn’t share your vision or values can lead to conflicts that have a devastating impact on the company.
• Underestimating financial needs: Depending on your industry, starting a business may require as little as $12,000, or could surpass $400,000. It’s important to have a realistic and detailed understanding of financial needs in the early stages of starting your business. Unpredictable factors and surprises may arise, but considering as many potential financial factors as possible can help reduce their impact.

Avoiding mistakes while starting a business is a major hurdle to overcome, but if you do so, you can begin with a firm foundation that can strengthen and inform the direction of your company.

Common Mistakes in Managing a Business

Once a business has gotten off the ground, it takes ongoing effort to remain successful. Every business is different and will face unique challenges, but some common mistakes can befall any company. Some of these include:

• Micromanaging: It can be easy to try and take on too much as the owner of a business. However, this can dilute your capabilities and ensure you aren’t putting enough effort into any one aspect of the company. It also deprives your staff of the ability to gain experience and grow in their career with the company. To avoid this, delegate tasks and offer guidance to your employees.
• Overexpansion: Growing too quickly can cause a company to extend beyond its reach and fail to uphold the values and service necessary to continue to succeed. It’s important to match growth with a gradual increase in operations, ensuring financing, staff, and customer base is there to support the expansion.
• Neglecting employee development: At the heart of any company is its personnel. Investing in training and development programs can help employees to stay engaged and grow in the company. This, in turn, can inspire loyalty and productivity.

These mistakes can be pitfalls that either erode or completely upend a company over time, so keeping them in mind can help a business thrive.

People Who May Not Be Suited to Business Ownership

Business ownership offers many hardships and rewards, and it could be a very attractive endeavor for those suited to the challenge. However, not everybody will find it similarly rewarding.

The day-to-day operation of a business can be inconsistent and full of uncertainty. Individuals with a low risk tolerance and who struggle with unpredictable conditions may be better suited elsewhere. Similarly, running a business requires adaptability and flexibility, so those who excel when operating under defined conditions may struggle.

Those who are uncomfortable with decision-making may also find difficulties with business ownership. Successfully running a business requires an individual who can think quickly and make wise decisions. Those who are indecisive may have difficulty with the types of duties important to running a business.

Alternative Career Paths

For those looking for a strong level of independence and financial security without starting a business, some alternative career paths may be attractive. These include careers that offer a degree of freedom and flexibility. With a projected 10.3 million self-employed workers by 2026, there are many opportunities for self-employment beyond starting a business.

Many careers—from writing to photography to coding—may be done in a freelance capacity. This allows professionals to set their own schedules and choose clients, offering a greater degree of independence than other more traditional careers.

Offering consultation services is a way to build off of professional experience while working on a more limited basis than a full-time employee. Consulting allows independent work with the flexibility to choose projects.

If the notion of freedom and independence seem like attractive aspects of business ownership, pursuing avenues such as these may offer similar benefits without all of the potential hardship that comes from running a business.

How To Become More Well-Suited to Business Ownership

Many of the traits necessary to successfully run a business can be learned, honed, or cultivated. Just because you don’t feel prepared currently doesn’t mean you can’t pursue avenues that will make you better suited to running a business. Some useful pursuits include:

• Gaining practical experience: Hands-on experience in an industry that interests you can give you a more intimate knowledge of what it takes to succeed in that market.
• Developing leadership skills: Taking on leadership roles in professional settings or community groups can help to gain skills useful in running a company.
• Staying informed: Education, both from formal institutes and through more general sources of reliable information, can help enrich a business owner with knowledge and understanding.

Running a business is challenging, and there’s no secret formula for success. However, understanding some of the traits of a successful business owner can hopefully help you start in a stronger position and continue to grow in your role.