Entrepreneurs face many decisions on a daily basis. One of the most important decisions an entrepreneur can make is the type of leadership style they choose to implement over their business.

A good entrepreneur understands the value of their team. So, it’s important they nurture an optimal relationship with their employees from the start by establishing a strong leadership role.

The leadership style a business owner chooses will form the foundation of the entire company culture, so it’s important to evaluate what sort of culture you want for your business and how you expect your employees will respond to different types of management.

At the same time, choosing a leadership style and actually implementing that style isn’t always easy. Running a business takes a toll on you, and forcing yourself to be the kind of boss you’re just not naturally meant to be will wear you down even more.

Here are the three main types of leadership for business owners:

Democratic

Also known as participatory leadership. The democratic leader allows equal input across their team when it comes to business decisions. They are open to communication and receptive to the team’s suggestions. This fosters greater employee satisfaction, as they feel more valued and heard within the overall company.

This type of leadership works best with a team that is creative with ample expertise. Otherwise, gridlock can halt productivity. Businesses with tight deadlines may not benefit as much under a democratic leadership.

Autocratic

On the other side of the democratic-style leadership is the autocratic style. Under the autocratic leadership, employees are not allowed to give input. All decisions are made by the boss, who controls all aspects of the business and delegates exact tasks for employees.

Unlike the democratic leadership, this can lead to lower employee satisfaction despite the potential for higher efficiency in the decision-making process. Employees who prefer their own autonomy would not fare well under this types of leadership. However, employees who prefer a distinct direction would prefer an autocratic leader.

Laissez-faire

Translating directly to ‘let them be’ in French, the laissez-faire leader takes a more hands-off approach to their business. They trust their employees to do what needs to be done without being managed too closely.

This style of leadership works well when there is a high level of trust between employee and employer. Employees that are skilled in their industry and don’t need to be micromanaged will thrive much better under a laissez-faire leader than employees who need more structure.

Choosing a leadership style will depend greatly on the goals of a business and what kind of employees work there. There is no one type of leadership that works best.

If you’re naturally easy-going, an autocratic approach will not come naturally to you and you may have a hard time convincing your employees to take you seriously. So, the most important thing is to be authentic no matter what leadership style you choose.

Being yourself is integral to being a good leader. Your employees will appreciate your authenticity and respect you more for it.

How do you lead in your business? Let me know in the comments below!

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