In many of our videos and articles, we delve into what it takes to build a world-class business by examining aspects such as gross profit management and working capital. But what about the driving force behind these successful ventures — the business owners and leaders themselves? What sets apart these people who lead highly successful, privately-owned businesses?
In this blog post, we’ll uncover the six traits of world-class business owners.
6 Traits of Exceptional Business Owners
1. They’re highly focused
World-class business owners share a crucial trait – they are exceptionally focused. While the image of entrepreneurs often involves endless creativity and a multitude of ideas, the reality is different for those who reach the pinnacle of success. Consider the Forbes 500 Richest People; most of them achieved their status by excelling in one specific area. Our clients might not be on those lists, but some are worth tens if not hundreds of millions. If financial success is your metric, these individuals have aced the business game.
Take Jeff Bezos, Warren Buffett or Bill Gates, who achieved greatness by honing in on one thing. Of course, there are outliers – think Elon Musk or Richard Branson who are known for their diverse ventures. But they’re the exception, not the rule. The takeaway here is simple: focus. World-class business owners invest the majority of their time in their primary venture. It doesn’t mean they don’t have interests in other areas, but the lion’s share of their time goes into that one business venture. It’s the secret sauce to their success.
2. They’re financially disciplined
World-class business owners exhibit a distinctive and disciplined approach to money management.
They treat the business’ money appropriately
Firstly, the second trait of being an exceptional business leader is that they don’t treat the money in theír business like their own.
Unlike less successful counterparts who use their business accounts as personal piggy banks, successful entrepreneurs adhere to a disciplined strategy. They don’t just randomly withdraw funds. Instead, they adopt a structured approach, paying themselves a fixed amount regularly. This payment, whether weekly or fortnightly, mirrors a standard employee’s consistency. It might not always be a traditional wage; it could be through another mechanism like drawings, considering they own the business. The key is the disciplined and regular nature of their financial decisions.
You might be thinking, “But you just said these people are worth tens or hundreds of millions of dollars. Surely they’re not just living off a $200,000 wage and that’s it?”
Well, they have very clear benchmarks, which leads to the second part of this equation.
They have a clear dividend policy with appropriate benchmarks
World-class business owners implement a clear dividend policy for withdrawing profits from their business. Before they pocket a cent, there’s a prerequisite: the business must hit a predefined benchmark. This dividend isn’t your average pocket change; it can be a substantial sum, akin to a $150,000 or even $250,000 wage. The process is systematic. As the business performs, a structured setup kicks in. Once surpassing a specific dollar value, a percentage of the funds flows out as a dividend.
Calculating this number involves careful consideration, especially in privately owned businesses where decision-makers are also the beneficiaries. To do so, think about what financial goals do you want to aim for outside of work? Whether it’s paying off a mortgage, funding a house extension, or achieving a personal milestone, dividends are versatile. Successful businesses strike a balance, pulling out for personal needs while retaining enough to propel future business goals.
3. They have simple, action-oriented goals
Top-tier business leaders embrace action-oriented goals, eschewing extensive 40 or 50-page business plans. They swear by simplicity, condensing their strategy to fit on a single page – a concept known as SOAP (Strategy On A Page).
The core principle is crystal clear: define what you aim to achieve, identify your target audience, and outline what sets you apart. Building on the laser focus discussed earlier, their attention is singularly fixated on this one-page strategy. What’s your plan for the next 12 months to three years? World-class business owners can describe this succinctly in just a few sentences.
4. They’re detail-oriented and stay informed at a high level
The fourth trait of a top-notch business owner is their exceptional attention to detail. It’s often unnerving when business leaders lack a grasp of their business intricacies. You might wonder, “How can I be at the top of the chain but still know every detail of my business?” The answer is that these details aren’t the low-level or day-to-day intricacies like every staff member’s birthday. It’s the high-level knowledge such as the gross profit of specific projects or the performance of a certain product range that matters.
Those are the type of details you wouldn’t expect someone at the highest level to know – but the successful ones make it their duty to. They embrace our philosophy of knowing everything, but doing nothing. And they achieve this by building a team adept at details, asking the right questions, and sharing vital information about business performance in areas like not just operations but also marketing and sales. They know these details and departments in a profound way.
Now is a good time to ask yourself if you understand the best-performing departments or individuals within your business. If not, there’s room for improvement – if you want to be best-in-class.
5. They build an elite team and cultivate a positive culture by sharing their vision and insights
The fifth trait of an exemplary business owner is they build a great team around them.
Recognising they can’t do it all themselves, they find elite performers across all areas of business including sales, marketing, finance, operations, product development and HR. Having secured a proficient team, they implement the strategic simplicity discussed earlier, ensuring everyone is rowing in the same direction.
World-class leaders then instill shared business goals, entrusting their team to execute. They maintain a comprehensive understanding of the details while still providing team leaders with valuable guidance and insights on business, industry trends and the envisioned direction. This approach encourages creativity and diverse perspectives, which is crucial for achieving the business’ strategic goals.
6. They’re respected by their team (and don’t focus on likeability)
The sixth and final trait of a world-class business owner is earning the respect of their team, intentionally avoiding or worrying about popularity.
In our experience of collaborating with accomplished business leaders, it’s evident exceptional leaders command both respect and genuine affection from the people they work with. Crucially, the emphasis lies on earning respect rather than being liked. Dispensing advice on cultivating respect may seem redundant, but how someone is perceived by their employees is crucial.
Conclusion
In summary, these six traits encapsulate the essence of world-class business owners. By maintaining exceptional focus, demonstrating financial discipline, setting action-oriented goals, being detail-oriented, building a stellar team, and earning respect, you can navigate your business towards unparalleled success.
Remember, success is not just about profitability but also about leaving a lasting, positive impact on your team and industry. How many of these traits do you resonate with, and what steps can you take to embody them in your business journey? World-class business ownership awaits those who embody these traits and continually strive for excellence.
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