Common Leadership Mistakes in Small Business


 An indispensable trait of excellent leaders is adaptability. They know the type, size, industries, and cultures of the organizations they lead, or else it is impossible to craft an effective action plan and practice proper management of employees. In for-profit organizations, the differences between small and big companies are pretty noticeable from the number of employees, annual revenues, and available resources. Despite the obvious distinctions, inexperienced leaders often make mistakes by implementing big-business leadership methods in small companies. Among the most common blunders are listed below.

·         Overly ambitious goals

The main reason many people fail to accomplish their New Year’s resolutions is because the objectives are too big to achieve within one year. Some set their expectations high without any second-thought about where they stand at the moment. For example if one of those resolutions is to purchase a brand new sports car, at least consider how much money you have in the bank right now and whether next year’s income will cover the cost of ownership. When put into a context of running a business, setting up goals must be consistent with the available resources.

Unrealistic goals set your employees to failures. You are not running big corporation with massive financial power to hire a considerable number of professionals. Be reasonable with the objectives. It takes time to increase business size and expand the company. Details of the objectives are also important. While it is true that every business is striving to meet and exceed expectations, a failure to reach goals does not mean everything is lost. Details of how failure happened and how far the company has gone to reach the target are still useful data to make adjustments in the future.

·         No other form of incentive but money

With big businesses, there is also big money to earn. Employees can be highly motivated to perform to their best for they are promised monetary bonus of impressive amount. Unfortunately you cannot play the same game in companies of smaller scale. The good thing is that employees in small business most likely understand the situation. They have reasonable expectations; otherwise they wouldn’t apply for the job to begin with. 

There are many other forms of motivation than money. It is easy to get acknowledge for good performance in small company, mainly because the objectives are not sky-high and partly for the lower number of internal competitions. Acknowledgement for good performance is an excellent motivator; so are stronger sense of ownership, better social consciousness, training programs, and advanced opportunities. The seemingly non-existent hierarchical order in a small business also makes employees feel more appreciated because their ideas are more likely heard and considered.

·         Micromanagement

Having fewer employees makes communication easier, but it does not mean leader can always closely observe what they do. Increased control is bad idea in management. Instead of showcasing strong confidence in employees’ collective capability to get the job done, micromanaging-leader demonstrates the lack of trust and restraints creativity.

In small business, leader is prone to address every small thing that happens inside the office. Every employee has different approach to tasks at hand, and some even think outside the box. Focus on results rather than constantly second-guessing how they do their jobs. Not only is micromanagement time-consuming, but also demoralizing and inefficient.

Make good choices and have a great day! Only you get to choose how you feel about it!

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Dr. Paul Gerhardt is a skilled leadership and diversity trainer who builds customized workshops online or at your workplace. He is a tenured professor of management. He is a diversity and leadership well-respected and trusted trainer who helps organizations get amazing returns on their training investment. Visit for more great free articles and to learn more about leadership effectiveness. Dr. Gerhardt is the author of several publications available on, including Diversity at Work, The Diversity King; Leadership Lucy and the Leadership Handbook. Consider inviting Dr. Paul Gerhardt to do customized leadership or diversity training at your organization. Most organizations find that diversity and leadership training by the right trainer yields a significant instant return on investment. You can get your FREE COPY of the Leadership Handbook by clicking this link:



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