5 Ways Leadership Is Different In Small Businesses

Posted on Jul 24th 2018


5 Ways Leadership Is Different In Small Businesses

"A leader is best when people barely know he exists. When his work is done, his aim fulfilled, they will say: we did it ourselves." - Lao Tzu

As a revered philosopher, author, and the father of Taoism, you might say Lao Tzu was an authority on leadership. In fact, his classic text - the Tao-Te-Ching - is one of the world's most translated pieces of literature.

However, the ancient Chinese philosopher would probably not take credit for any of it. And that's kind of the point of his quote above.

When a leader guides people to success unobtrusively, everyone wins. This is true for both small and large businesses.

Leadership virtues such as this serve both types of businesses, yet, each requires a different leadership approach.

Here are five ways leadership is different in small businesses:

#1: Versatility and Adaptability

Because there are much fewer employees in a small business, leaders usually have to wear many hats.

Without the luxury of a large staff, owners must be willing and able to roll up their sleeves and pitch in as needed.

Being proficient in several areas of the business is often a necessity in a small business. Entrepreneur finds this ability to transition among disciplines an "indispensable quality" for entrepreneurs.

At Romp n' Roll, the ability to multi-task is one of the key characteristics we look for in a franchisee.

While this hands-on leadership approach can be tricky to navigate at times, it can also be extremely rewarding.

And illuminating. Every episode of Undercover Boss proves how much leaders can learn about their business by walking in another man's "moccasins".

#2: Mentorship

In a small business, you are operating with a lean and mean workforce. You need to rely on the ability of your small team, just as they need to rely on you.

The ability to empower and develop these individuals is an essential leadership quality in the small business owner. After all, a chain is only as strong as its weakest link.

The direct interaction a small business leader has with their employees provides an opportunity to inspire and mentor. This is often one of the most rewarding aspects of operating a small business.

As Oprah Winfrey puts it, "A mentor is someone who allows you to see the hope inside yourself."

#3: Personal Development

Small businesses have no cushion, extra layers of management, or board of directors to keep things going. Owners are the driving force - with the fate of their business resting squarely on their own shoulders.

This level of responsibility can tempt leaders to hunker down and keep their nose to the grindstone.

Hard work is great - and necessary - in building a business. Yet, leaders need to work just as hard (harder even, possibly) on themselves.

Personal fulfillment is very important. It's one of the things that makes Romp n' Roll attractive to many franchisees. They have the ability to operate a business while giving back to the community

An article in Inc. suggests that entrepreneurs ask themselves, "What am I becoming?" This question will guide them along the road of personal growth, and (consequently) success.

#4: Leading By Example

In larger businesses, owners are usually rarely (if ever) seen by employees.

Smaller businesses offer no such buffer. Leadership is under the watchful eye of the very people they are responsible for. This requires 100% accountability and responsibility.

Leaders in small businesses set the example for professionalism in the workplace. Their own work ethic and the passion they display will be mirrored by their employees - good or bad.

#5: Customer Interaction

Leaders in large companies often have little interaction with the customer. They have departments and managers and supervisors and sales associates to do that.

The small business owner? Not a chance. They often need to make sales, handle customer service, interact with customers, and generally be the face of the business.

For these reasons, leadership in small businesses requires excellent customer skills.

Partnering in Leadership

Knowing these five differences in leadership are important when considering starting your own small business or buying a franchise.

If you don't believe you have the qualities outlined here, perhaps a trusted partner does.

Many of our Romp n' Roll franchises are operated by friends, couples, or business associates. Oftentimes, one person's strengths balance out a business partnership and help create a successful leadership team.

Read more about the pros and cons of buying a franchise with a partner.

Michael Barnett

Michael Barnett is the Co-Founder and CEO of Romp n' Roll. In addition to leading the Romp n' Roll management team, Michael is an active member of the International Franchise Association, the National Association for the Education of Young Children, and serves on the Board of Directors for Connor's Heroes and Juniata College Center for Entrepreneurial Leadership. He and his wife, Babz, were featured on the first season of ABC-TV's Shark Tank.