The 5 key leadership skills business owners need to have

Leadership skills for business owners are just plain different from those required in the corporate environment, writes Alan Manly, CEO of CampusQ and author of The Unlikely Entrepreneur. So what leadership skills do business owners need?

While 64.4 per cent of Australians are employed, only 14 per cent are identified as owner-managers of businesses in 2024, according to the ABS. With this small percentage of the population owning businesses, it’s logical to conclude that the leadership skills required would differ for those brave enough to strike out on their own.

Five essential leadership skills for business owners to master

Ownership itself is a skill

Being a business owner often means risking it all. Many owners have given up secure jobs, steady incomes and sometimes even their homes to pursue their vision. The skill required here isn’t just about having nerves of steel; it’s a kind of self-drive that helps you push past the fear of losing it all. Embracing risk and taking ownership of your successes and failures is a skill not many people outside of business ownership are forced to develop. It’s not just about being in charge; it’s about having the resilience to face risks head-on and make tough decisions that others might shy away from.

Street smarts

Once you’ve acquired ownership by either building or buying a business, the next skill required is protecting and retaining that business. The moment a whiff of success is in the air, competition will be on your doorstep. Traditional thinking suggests that competition is external, but history has shown us that the biggest threats often come from within.

Cicero, the Roman statesman, famously said, “The enemy is within the gates; it is with our own luxury, our own folly, our own criminality that we have to contend.” In a business context, this means that the internal threats—whether from complacency or betrayal—can be the most destructive. Business owners must remain vigilant against employees who may steal customers and spin off their own ventures. One person’s spin-off is another person’s rip-off and being aware of this is a crucial skill for any business owner.

Self-confidence

The self-confidence needed by business owners is not just about being able to speak in public or lead a meeting. It’s a deeper confidence often found in those who are comfortable working alone and making decisions without validation from others. This type of self-confidence enables business owners to press forward in the face of criticism, doubt, or loneliness. It’s the belief in one’s own vision, even when others can’t see it.

This is not a confidence built by applause or teamwork, but one that grows in quiet moments of reflection and independent decision-making. In many ways, it’s more about resilience than bravado.

Independent thinking

The idiom “it’s lonely at the top” often applies to business owners of all sizes. This expression was first recorded by German philosopher Arthur Schopenhauer, who wrote, “At the height, it must be lonely.” More recently, the idea has been echoed in the lyrics of a popular song by Nigerian artist Asake, where he sings, “Out here on the road chasing my dream because I know no one can chase it for me.”

The ability to think independently and make decisions without consensus is a critical skill for business owners. It’s about having the courage to act on your convictions, even when the path isn’t clear and there’s no one else to share the burden.

Financial responsibility

The less glamorous but arguably most essential skill for a business owner is financial responsibility. All the fancy accounting terms boil down to a simple principle: ensuring there’s more cash coming in than going out. After a few near-misses with liquidity issues, most seasoned business owners adopt a near-obsessive focus on cash flow. It becomes a mantra: “cash flow, cash flow, cash flow.”

Being financially responsible isn’t just about keeping the books balanced; it’s about understanding the ebb and flow of money within the business and making sure you’re prepared for unexpected expenses or downturns. It’s a discipline that requires constant attention and the willingness to make tough choices to keep the business viable.

With only 14 per cent of Australians identified as business owners, finding yourself in this small group is both a challenge and a privilege. If the business gods tolerate you and luck is on your side, you may achieve more success than you ever would have working for someone else. But either way, you won’t die wondering.

The heights may be daunting, but the view is better—if the gods of business allow it. Business owners get to live out a dream that many people only imagine, and while the journey can be lonely at times, it is also immensely rewarding.

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