How do the characteristics attributed to leaders and entrepreneurs compare or contrast? Merriam-Webster defines a leader as someone who guides or commands a group of people and who has been given some level of authority to do so. An entrepreneur, on the other hand, is “a person who starts a business and is willing to risk loss in order to make money.” These definitions present a preliminary set of differences between the two, but in some respects, leaders and entrepreneurs might actually be closer to one and the same.
Remember learning in geometry class that every square is a rectangle but not every rectangle is a square? Analogously, this relationship applies nicely to the consideration of leaders (the square) and entrepreneurs (the rectangle). Leaders share quite a bit in common with entrepreneurs, and in fact, much of their success depends on possessing and exhibiting entrepreneurial traits. At the same time, entrepreneurs might occasionally show strong signs of leadership, although such skills may not be crucial to sparking innovation. Every leader is an entrepreneur (at least in some ways), but not every entrepreneur is (or needs to be) a leader.
Putting the squares and rectangles metaphor to the test, here is a list of 10 entrepreneurial attributes that leaders should develop and apply to strengthen their business pursuits.
Entrepreneurs start or create something that did not previously exist, and this process invariably uncovers a series of hidden variables that require high-level decisions along the way. Leaders may not have started their respective businesses, but they hold the same responsibility for navigating the market and its curveballs as they move forward.
2. Financial Literacy
Money management is a pivotal skill that all entrepreneurs and leaders must share. This means knowing not only how to balance a basic checkbook, but also how to account for thousands or millions in investor funds as well as the paychecks of all the jobs created by the product or service. Income and expense are at the base of nearly every decision a leader will make.
3. Strong Networking Skills
Some of the most successful ventures start with an entrepreneur who knows how to set up a network of people and businesses that can assist in getting an idea off the ground. Networking can also support the longevity of a business if done correctly. Leaders should actively establish professional relationships with others and be aware of the resources and insight they can offer in return.
4. Ability to Embrace Risk
Entrepreneurs of necessity must be able to tolerate the uncertainties involved in innovation, including the prospect of potential failure. Learning how to manage fear by controlling thoughts is one of the greatest keys to success as an entrepreneur and leader. Leaders who can harness the power of their thoughts can better negotiate favorable outcomes and know how to respond to results that are out of their control.
5. Passionate Drive
The notion of doing what you love is more important during the lows than the highs. Products and services are at the mercy of the consumer, and because customer needs and interests fluctuate, so too does the trajectory of a business. Entrepreneurs and leaders alike need a passion for their profession to pull themselves and those they lead through difficult times.
Successful entrepreneurs not only thrive on being in the spotlight, but they know how to point it at themselves and leverage the publicity to their advantage. The trait is not one of pride, but of putting a face to the business and helping inform investors and consumers as they decide how to spend their money. Leaders who strategically self-promote can open new avenues for their businesses.
Entrepreneurs recognize themselves as a valuable tool and as such, they seek self-improvement through a variety of investments. Self-investing has a few crossovers with networking, such as joining professional organizations or think tanks, but leaders should also carve out time to read the latest publications in their given field.
8. Organization Skills
A fair amount of entrepreneurs work from home and face the task of separating business from home life. Whether in a corporate office or in the room next to the pantry, leaders can maximize their efficiency by avoiding clutter and maintaining a presentable office space ready for visitors at a moment’s notice.
9. Delegation Skills
When it comes to innovation, entrepreneurs understandably want to be involved in every aspect of selling or promoting their creations. However, as good leaders also know, delegation is a must in any new business venture. This can be as simple as recognizing your strengths and looking to others to contribute in the other areas.
10. Creative Vision
Recognizing opportunity and responding with creativity is the hallmark trait of an entrepreneur. Leaders can develop creative vision by working on and combining the characteristics listed here. A willingness to learn and try new things most often generates higher levels of creativity.