It is not easy to start a small company. Some small businesses succeed, while others fail. According to the U.S. Bureau of Labor Statistics, out of 100 businesses that were first started in March 2020 only 18 were still open one year later.
Many factors determine whether or not your business is successful. You can’t control some factors, like the economic climate. Some factors, such as your character, are crucial to the success of your business.
The Key Takeaways
- Some psychological traits may play a role in your success as a small-business owner, and can help you to stay on track during difficult times.
- For day-today management, functional business skills are essential.
- You can use social skills to build your business by involving others.
What is a “successful” small business?
According to a 2018 study of how outside stakeholders such as customers and banks measure success in a small business, it boils down to the following major factors: According to a study conducted in 2018, the factors that outside stakeholders like customers and banks use to measure success of a small company are: 2
- Profitability of your business
- Your business will grow or not
- Your employees and customers’ happiness levels
- If your business is well-respected in the community
Small business owners tend to share similar personality traits.
The psychological characteristics of successful business owners
Clate Mask, CEO at Keap (a software company that provides sales and marketing to entrepreneurs), told The Balance via email: “I’ve had thousands of small business clients over the years.” There are many smart and talented entrepreneurs who have failed.
You are more likely to be successful as a small-business owner if you possess certain psychological traits. They are essential because they form the basis for the rest of your traits and skills.
Optimism
Mask added that there are also many challenges to overcome. Nobody can predict a war, a pandemic or other uncontrollable factors. You’ll also be thrown more curveballs as time passes.
You will continue to move forward in difficult situations if you have optimism. This is a feeling of hope and assurance that the future will turn out well. Pessimism is a common emotion, and it can be experienced in different degrees by most people. However, having a positive outlook will give you the strength to face business challenges.
Adaptability
Adaptability is another key to coping with challenges that are constant. Do you still use fax machines and paper documents when everything has moved to digital formats? Are you willing to change your business practices and adapt to the way things are going? This trait is likely to make business owners more successful, particularly over the long-term. 3
Emotional Resilience
Many people find it difficult to stay true to their path when they are emotionally impacted. They may be optimistic, adaptable and able to roll with any situation. You might feel guilty if you miss a family gathering because you need to go to your store and get a large order of products. Your business would not be able make money without the product.
Mask stated that “at some point, you will disappoint everyone – friends, family, co-workers, and yourself.” It takes grit and determination to persevere through these stages in order to achieve success.
The Work-Related Control Locus
This idea, coined by psychologist Julian Rotter in 1954, refers to whether you believe you have control over your environment–specifically, your work environment.4 If you personally believe that you have some amount of power to shape your destiny, you’re more likely to succeed in business. If you believe that your business’s success is more dependent on the whims and fancies of others than on you, you might not be as successful.
Strong Work Ethics
If you lack a strong work ethics, you will not be able to run a successful street lemonade stand. Small business owners are eager to see their website or store grow and earn money. This requires hard work, including early mornings, desk meals, late nights and giving up hobbies.
Successful business owners have certain characteristics.
The way you run your business on a daily basis is also a major factor that will determine whether or not it succeeds.
Creativity
Humans are creative, and that’s what separates us from robots. Being a creative thinker is directly related to adaptability, as you can implement new ideas to help your business overcome obstacles.
Self-Discipline
Many people say they are capable of running a successful business but in reality, not many can. Most successful entrepreneurs can set rules and stick to them.
stopping when needed is an area that’s often overlooked. Mask explained that as entrepreneurs, they want to be working on their business 24/7. But being able set boundaries and achieve balance will pay dividends in the long and short term.
Note:
It’s important to work hard, but you shouldn’t miss your childs appointments with the doctor.
Mindset oriented towards goals
A 2003 University of Tennessee study found that being able set SMART goals is one of the most important skills of small business owners. It helps to keep the business on track and avoids it wandering aimlessly. Small business owners should set both short-term and mid-term goals.
The Social Characteristics Of Successful Business Owners
Extroversion is a trait that many successful business owners possess, but it’s not necessary to be socially outgoing to succeed. Entrepreneurs who are introverted can also succeed as long as the can identify the traits that extroverts possess and work on them.
Networking
It’s true that you’ve heard it said, “It’s not about what you know but who you know.” You need customers to make your business successful, but you have to find a way to attract those customers. A good network can help you do that.
You will be able to succeed if you can develop relationships with others through virtual and physical networks.
Note:
In almost every study or survey The Balance reviewed, networking was consistently rated as one of most important traits for small business owners.
Negotiation
Some businesses depend on standard pricing and services. Others rely more on flexible terms. You’ll need negotiation skill more if you are a pawnbroker than a baker. Negotiating is a skill that every small business owner must learn.
Leading
You’ll have to lead a team unless you are running a ship alone. A good leader is a skill that takes experience and time. It involves things like identifying your team’s strengths, motivating them and knowing what to do when they don’t perform well.
As entrepreneurs, you will need to develop different leadership styles with time. If, for instance, you still manage your 500-person staff the same way you did when you had only five employees, your business will not last very long.
FAQs (Frequently Asked Questions)
What constitutes a small-scale business?
Small businesses are defined as those with fewer than 10 employees and annual revenues below a certain threshold. The Small Business Administration’s (SBA) ” Table of Size Standards” can be used to help determine the size of a business.
How can you run a small business successfully?
A business plan will help you focus on the things your business needs in order to grow and succeed. Keep organized and keep pushing forward to achieve your goals. You can run a successful company by being involved both in the daily operations and the overall picture. Leading your employees will also be helpful.
