What it Takes to Be a Successful Small Business Owner in 2021
“Small business isn’t for the faint of heart. It’s for the brave, the patient, and the persistent. It’s for the overcomer.” This anonymous quote perfectly describes the character of a successful small business owner. It takes more work than most people realize and you have to be willing to plow through when the going gets tough. Whether you’re thinking about opening an ice cream shop or your own consulting firm, business owners need to be determined, open-minded thinkers willing to dive headfirst into the unknown.
That said, owning a business also offers a unique career path that allows for creative flexibility and the ability to be your own boss. In order to venture out as a self-made entrepreneur, you need to develop a business plan and create a business website.
Think you have what it takes? Here’s what you need to know about becoming a small business owner.
Who qualifies as a small business owner?
First, let’s discuss exactly what a small business owner is. The lines between a small and medium-sized business are sometimes blurry, and the official definition can vary based on your country.
In general, whether or not your company is considered a small business is based on different factors, including the average revenue of your company and the number of employees you hire. In the United States, businesses that earn less than $7 million in revenue or that have fewer than 500 employees fall into this category. In contrast, Europe defines a small business as having less than 250 employees and in Australia, it’s less than 15!
But why are these definitions important? If you qualify as a small business owner in the US, you may be eligible to apply for government loans from the Small Business Administration (SBA). These loans come with other benefits, too, like guidance and counseling, lower interest payments, and flexible overhead. The SBA also offers funding for grants to philanthropic organizations as well as businesses in specific industries, such as exporting, science and research.
Small business and the economy
Research shows that small business owners are the backbone of America, and are a major force in driving the economy forward. According to the Small Business Administration’s Office of Advocacy, there are 30.2 million small businesses in the US, comprising 99.9% of all businesses in America. Small businesses are also responsible for creating 1.5 million jobs every year and account for 64% of new jobs created in the United States.
They have also been a factor in empowering people who have historically faced challenges entering the business world, such as women and minorities. Between 2014-2016, minority-owned businesses increased by 11%. And in 2019, 9.9 million small business owners were women, compared to 7.8 million in 2007. These numbers are telling and are a testament to the progress being made in today’s business world.
Pros and cons of being a small business owner
According to a survey conducted by the digital marketing firm Constant Contact, 56% of small business owners feel they can never be away from their businesses, and 84% say that if they could, they would start their businesses all over again.
Clearly, being a business owner has its perks and its downsides. But most agree that the pros heavily outweigh the cons.
Why does someone decide to start a business anyway? One of the main reasons is independence and the autonomy to do things your own way. In fact, small business owners report that there are two driving factors behind their motivation: the ability to pursue their passions and professional flexibility. There’s nothing like getting to be your own boss and creating your own product or service. It’s an even better feeling when customers are willing to spend their hard-earned money to buy it.
Other benefits include getting to hire your own employees (and who wouldn’t want to choose their own coworkers?) and setting the tone for your business’ company culture. Will you create an environment in which people are expected to wear suits everyday? Or will you allow your employees to bring their dogs to work and wear t-shirts and jeans? It’s your call.
It’s also worth mentioning that because most small business owners register as sole proprietors, partnerships, or limited liability companies (LLCs), filing taxes and business registration is simpler than it is for some other types of businesses, such as corporations.
The downsides of being a small business owner are overshadowed by the advantages. Still, it’s no secret that business ownership is not for everyone.
Small business owners work exceedingly hard, spending their own time and money to operate and market their businesses. Because of this, they may not make a profit for quite some time. They also have to say goodbye to 40-hour work weeks, at least at the beginning. Often, they work 50-70 hours a week, which can sometimes make work-life balance nearly impossible. And even after putting in the hours, 56% claim they don’t have enough time to get everything done.
Wearing multiple hats at once can also cause extra stress, anxiety and fear of failure. But don’t let these factors sway you from creating your own small business. Perseverance and determination are the secret sauce for success.
10 qualities of successful small business owners
That leads us to the next point: small business owners require a unique combination of certain soft skills in order to keep their companies up and running. Being comfortable with taking risks and learning how to manage a budget are just two of the skills that are essential for business management.
With that in mind, here are 10 essential qualities of successful small business owners:
01. Be personable and approachable
Being kind to others may sound trite, but making connections with your employees, customers, vendors and even competitors can actually bring you more business. It’s a known fact that the more employees like and respect their employers, the stronger their sense of team motivation.
Additionally, consumers don’t make purchasing decisions based on a product alone; they are also swayed by what a brand represents. If you’re friendly to those around you, your customers will associate your friendly demeanor with your product.
In fact, experts point out that kindness in itself is a powerful leadership strategy. You are more likely to have repeat customers who will tell their friends and family to buy from you instead of the guy down the street. In turn, your bottom line will increase and people will get the product they need (and let’s face it--yours is the best out there anyway).
02. Be prepared to evolve
Small business owners need to be prepared to roll with the punches. The market will inevitably shift over time, and business owners need to adapt to keep their product relevant. Refusing to change your approach to what consumers want or need will only hurt you in the long run.
An excellent example is the way some restaurants adapted to the changes brought about by Covid-19. The Chicago-based, three Michelin star restaurant, Alinea, is known for its lavish, avant garde tableside presentations. But after the pandemic hit, Alinea shifted gears immediately and began offering fine dining meals to go. Its ability to quickly adapt allowed it to stay afloat and let the public enjoy its cuisine - a win-win.
03. Take Risks
Mark Zuckerberg, CEO of Facebook, once noted that “the biggest risk is not taking any risk.” Starting a business always means taking a chance; there’s no way to know for certain whether it will work.
While successful small business owners make educated decisions and use market research to drive their ideas forward, it’s impossible to know what the future holds. Investing your own time and money into a business is always a risk but goes hand in hand with being a business owner.
04. Be independent
The ability to think for yourself and make important decisions are both vital traits for any entrepreneur. Independence provides the drive to get where you want to go without the influence of others’ opinions or any outside noise. Perhaps you have a unique idea for a product or service that hasn’t been created before. Independence gives you the ability to put yourself out there and take the initiative to make it happen.
05. Be confident
Confidence and independence often go hand-in-hand. Having confidence in your business and financial decisions is vital. Because your business lives and dies with you, you need to believe in yourself to move forward and weather the storm through difficult situations.
On top of that, confidence instills respect and encourages others to see you as a leader. This can have a major impact on team management. Strong leaders are rewarded with increased productivity and creativity from their employees, making the business overall more efficient.
06. Know when to take a break
While it’s true that small business owners work tirelessly, they also know when to take a break. Burnout is characterized by exhaustion, cynicism, and inefficacy, and can lead to feelings of overwhelm and decreased motivation. The best way to avoid it is by making sure to incorporate certain habits into your daily life, such as scheduling time away from your business.
Even if all you get is thirty solid minutes to focus on yourself or spend time with loved ones, make sure to do it. And don’t let yourself look at financial reports or emails during this time. Successful business owners understand the value of having time away from their work, even if it’s only for a short time each day.
07. Dedication and persistence
Ever hear the expression that success isn’t linear? This rings particularly true for business owners. It normally takes time for any business to be profitable and to work out all the kinks so things run smoothly. You may not get it right at the beginning. You’ll most likely have to make adjustments along the way, such as prices, your business model, or even your product itself. But not giving up and sticking to it is what’s going to get you through.
08. Stick to the budget
Overspending can be the death of your business. In fact, according to a study conducted by US Bank, 82% of small businesses fail due to poor cash flow management. When creating your budget and business plan, a tip is to overestimate expenses and underestimate income. That way you’ll never be stretched too thin and always be prepared for unexpected costs.
More often than not, the number of things you have to do is overwhelming. If you work alone and don’t have anyone to delegate tasks to, this trait is particularly important.
As a business owner, you’ll need to hone your project management skills to determine which tasks have the most business value and which ones can fall lower on your priority list. A good way to start this process is by labeling your list of tasks as important or urgent. As a rule of thumb:
Important tasks are those that are vital to the business’ long-term success but may not need to get done right away.
Urgent ones are those that require immediate attention and are necessary to keep your business up and running. These should always be prioritized first.
A handy tool to help determine which tasks to prioritize is Stephen Covey’s Time Management Matrix. This simple chart can help you easily break down your list of projects into four main categories: urgent/important, not urgent/important, urgent/not important and not urgent/not important.
10. Look at the big picture
It can be easy to get caught up in the day-to-day. Any difficulties that arise may cause you to question why you started your business in the first place. But remind yourself of those reasons, and look at your overall success instead of minor pitfalls - that’s what will keep you moving forward in the long run.
Small Business Expert and Marketing Blogger