Traits of a successful business owner
With more than half a million small business owners in New Zealand, there’s a breadth of backgrounds, cultures and approaches that make up our community. But while small businesses really do take all sorts, we’ve been able to observe the common traits that all successful owners appear to have. In this article, we’ll cover what some of these are. The good news? All of these traits can be worked on and developed with a bit of focus and the right support.
With that, let’s get into it!
A clear vision or purpose as to why they’re in business
Goal setting is tremendously important for a business owner. The vision for the business sets a north star (sometimes highly ambitious) that can inform a more practical plan and daily decision making. Without a vision or purpose of the business, choices can be made aimlessly to no medium or long-term end. Having a purpose in a small business will also help you to navigate through the inevitable periods where things are tough.
A vision or purpose can sometimes sound somewhat fanciful or fluffy to the hard-working small business owner. But actually, a vision doesn’t need to come with corporate jargon. At its core, this is an exercise in asking and answering the question of “Why?”. Why are you in business? There are no real wrong answers here, provided your objective is positive.
Some business owners have a number of reasons they’re doing what they do, but we encourage clients to really nail down their purpose as part of their business planning. A purpose might be things like:
- To achieve financial freedom
- To retire early
- To build a business to sell
- To fix a perceived gap in the market
- To create incredible products for customers
- To enjoy work
- To have autonomy and control over earning potential
We’ll leave it to you to decide what your purpose might be. But we can support you to define this as part of our general business advisory help we offer.
A vision while related, speaks more to the imagining of an ideal future state that represents your business at its best. Visions should be ambitious and aspirational. They should almost feel out of reach, but not impossible. The intent behind a vision, like a purpose, is to have a concrete reminder of your ultimate goal in the business. Now, this vision may change over time as the business naturally grows and develops - and that’s totally fine. Many businesses that realise their vision, will update what they’re aiming for to take things to the next level.
For example, a vision may start out as:
“We are providing end to end home construction services for the Wellington City region, known for our excellent customer care and quality built houses.
But may evolve as a business grows to represent a different degree of success:
“We are the trusted provider for the lower North Island for all things residential construction, with 5 teams dedicated to excellent service and exemplary houses.”
The successful business owners we work with have these parts of their business captured, at least mentally if not manifesting physically (such as a version adapted for marketing or brand collateral).
An open mind to improvement or change
Humility is so important for a business owner to grow and reach their potential. We are constantly presented with learning opportunities in our work, the industry, competitors, our customers and our partners. When a business owner has tuned these frequencies out and simply decided that their way is the only way, they’re directly preventing their business from getting better.
This open-minded quality doesn’t mean that core values and principles shouldn’t be stuck to. In fact, the key to utilising an open-minded attitude is to have a good sense of what is and isn’t working in your business. Not all ideas will be good ones, so the successful business owner needs to be both receptive to new ideas, and a good filter of the poor ones!
The ability to plan ahead
Today’s challenges are important, but they’ll soon be yesterday’s news. Planning and forecasting is absolutely crucial from a strategic and decision making perspective. Thinking months in advance or even a year ahead helps to get in front of those obstacles or challenges that will be faced.
Rushing to catch up or respond to a challenge without foresight isn’t just tough, it can derail the business. Instead of being blindsided, successful business owners will have their financial, people, and product/service roadmap in place, using this planning to proactively work on the business.
Some examples of planning ahead include:
- Knowing the threshold of clients that will require an employee to be hired.
- Understanding the forecast of revenue for the next 3, 6, 12 months.
- Staying close to your team to assess if any staff are at ‘flight risk’ of leaving.
- Keeping in contact with potential candidates that you may wish to hire in the future.
- Planning overhead and COGS costs you’ll incur, such as maintenance of equipment, or travel.
Working with a financial forecast isn’t simply a process of knowing what you’ll likely make in a month, it can drive sales and marketing decisions or identify if the business needs to be reducing costs to prepare for a quiet period.
Knowing what they’re good at (and what they’re not)
This really can’t be overstated. The best business owners have a clear sense of who they are and what value they provide. They don’t profess to be the expert at everything, and their gift is often as much about identifying talent as it is possessing it. Many small business owners will start out doing everything out of necessity. But their growth plan will involve tapping into the expertise of others to maximise their time to apply it to what they’re best at.
When a business owner has a clear picture of their deficiencies, they will make sound decisions as to the employees they bring on board or the partners and services they engage alongside the business. Even highly experienced business owners see the value in outside help be it financial, strategic or otherwise.
Confidence to make decisions
Starting, running and growing a small business takes confidence. There won’t be a day that goes by where you’ll need to make decisions for the benefit of your business. The pace of a small business with customers coming on board means these calls often must be made under pressure.
Confidence doesn’t necessarily mean you’re an extrovert, brash, or haven’t considered the decision carefully. The confident small business owner is purely comfortable in themselves that they have a clear understanding of what’s good for the business and their customers.
Sometimes a hard decision needs to be made, such as ceasing business with a supplier or saying no to prospective work due to a lack of resources to do a good job. These hard decisions are what grow us into savvy, wise business people.
Confidence in decision making also includes a comfort level that the outcome may not be as intended or detrimental, but will provide a learning opportunity. There is not a business owner out there who has made the right call 100% of the time. Most of the best business owners we know have become so good through the mistakes they’ve made. But they’ve all had the confidence to get back on the horse and keep at it.
Good with people
Much like it doesn’t take an outgoing personality to be confident with decisions, there are plenty of introverted business owners who’re also excellent with their employees, customers and suppliers. People skills in New Zealand’s business landscape share much with our broader society; we respond well to positivity, care and manners. A business owner that opts for a hard, ruthless communication style, will inevitably hit obstacles such as struggling to keep a team motivated and engaged, or hurting a customer relationship.
The great Kiwi business owners don’t just know how to make money, they know how to make friends. Even if your business is not people-centric, there are many moments across the day or week where you’ll need to interact. Often the difference maker from a customer experience perspective is the business who they feel the best talking to.
Adapting to the market or their customers
This one might be filed under ‘open-mindedness’ as well, but more specifically we’re talking about the business owner’s ability to see a change in their market or client needs and change the business to meet this. A big part of this process is keeping visibility across news, competitors, and their own customers’ feedback. Successful owners have a number of data points from which to draw their intel about the market they operate in and use this to inform decision making, planning, and changes to the service.
Being blindsided by a change can take months or longer to recover from, whereas the well-prepared small business can enjoy continuity seamlessly through big market forces. Having independent outside perspectives here can also make this a much easier process. We often help our businesses see the market they’re operating within differently, arming them with the tools to adapt swiftly.
Keeping costs under control
The financials, no matter your purpose, are critical to longevity. Good business owners take care to monitor what they’re spending to run the business, knowing that every dollar saved from expenses is another dollar in their pocket. Business owners scrutinise their expenditures routinely and don’t simply accept an overhead as read. Keeping a visible forecast of income and outgoings is a priority for business owners who want to get ahead at the end of the month.
Being a lifelong student
Upskilling can be really hard to prioritise in a busy small business when the priority is serving your customer. But long term your customers are better served by a provider who is sharpening their tools regularly. A student of business is a mindset more than it is one single activity. But this mindset of 'always learning' can help to prioritise time for self-directed knowledge development, attending workshops, or more formal qualifications.
Business owners with a long-term view for success will also assume the role of the student by engaging coaches and mentors.
Asking for help to grow
Part of this coaching and mentorship may come in the form of a proper business advisor who can apply proven financial and business methodologies to your business. Asking for help is not a sign of weakness, it’s a maturity level that good business owners have to tap into the resources of others to benefit their businesses growth.
RightWay’s Business Partners are experienced business people who get it. We support Kiwi businesses nationwide to navigate challenges and reach their goals. Learn more about engaging our business advisory services today.
Read our other business growth guides
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Cash flow is what drives your business and keeps you awake (or preferably, asleep!) at night. Put simply, cash flow is the lifeblood of your business. It’s also one of the most important measures of success of your business. Your business is like the game of monopoly – you can’t pass “go” without cash flow.
Managing a business can be overwhelming! More often than not you’ll be wearing multiple hats throughout each day as you flit between being a people manager, managing the businesses financials, forecasting, strategically advertising your products and/or services, researching new technologies along with a multitude of other tasks required daily!
Okay, it may sound like a silly question. Of course you know your business! Who’s closer to your day to day operations than you? And that’s fair enough. But when small business owners are doing everything, there’s going to be elements of the business that get more attention than others. It’s only reasonable that providing your service to your customers is priority number one. Even well-established small businesses turning over reasonable revenue can lose sight of the detail around the financials.
Ever competed in a race where you weren’t told where the finish line was? Tried your hand at baking without a recipe book? How about leaving for holiday without packing your bags? If these all sound ridiculous to you, then let us draw the comparison with a business that doesn’t make plans. Making plans and understanding parameters is so important for business success, but many fledgling businesses have barely planned tomorrow let alone the long term.
It is very normal for business owners to be entrenched in the daily goings on of their businesses. With varying to do lists and high priority tasks requiring their daily attention, it can be hard to take the time to stop and look at the big picture. And that’s just the business part, let alone our busy, and somewhat chaotic, personal lives.
However, it is vital as a business owner or business manager to periodically pull your head out of the trenches and take the time to sit back and review your business as a whole, to ensure you are on track to success.