The most common reason people become self-employed is very simple: to have more control. For others, wealth creation is paramount, although small businesses are also more likely to fail and lose money. But is it worth the hard work and the added risk? And what makes a good business owner in the first place?

If you are a small business owner or dream of becoming one, you need to have the skills it takes to succeed. We looked at some of our business-owner clients to learn which common traits successful entrepreneurs had. Do you have these key business owner skills?

Delayed Gratification

Most successful entrepreneurs have this in common. When running a business, they’re willing to earn less now knowing they’ll build wealth in the future. In fact, in a test known as the Stanford marshmallow experiment, scientists discovered that children who were able to wait longer for rewards often did better in life, achieving better test scores, higher levels of education, and were even healthier than their peers!

As a small business owner, you know there’s no such thing as the 40-hour work week! The boss usually works longer hours than fellow salaried employees of the same age. Despite these long hours and responsibilities, small business owners generally have lower incomes.

Although they earn less, small business owners have a net worth based on the value of their business and, on average, have a higher net worth than workers of similar age and gender. However, their super balances are generally much lower than their salaried counterparts. The reason for this is simple: Many small business owners prefer to use surplus funds to grow their business if they have the option, in the expectation that the eventual sale will finance their retirement.

Conserving and Protecting Their Investment

Another trait of successful entrepreneurs is a drive to conserve and protect. In other words, managing risk and planning for the future. 

It is common for small business owners to use their home as collateral for business loans. This is a requirement of many lenders who want to ensure that the owner has a vested interest in the success of the business. For this reason, associated risk management is imperative. Life insurance can be used to protect income, home, and other personal assets in the event that the business owner dies or is unable to work to meet loan commitments.

Another area that small business owners often overlook is the need for key person insurance and overhead insurance. These policies are designed to protect the business and not the owner’s personal position. If the company can continue to fulfil its obligations, the corresponding personal risk for the owner is reduced.

Knowing When It’s Time to Exit

With less than one in three entrepreneurs having a succession plan, most of these entrepreneurs don’t plan their future well. And with nearly 1 million small Australian businesses without employees, the owner is the company.

This limits the company’s value as a saleable asset, which means that when the time comes, many owners will have a hard time extracting the value of the capital they have built up in the company. Having an exit plan as part of your business strategy is essential but often overlooked.

For owners selling their business, the proper use of capital gains tax (CGT) benefits for small businesses, for example, can significantly reduce the potential tax burden.

The Value of Teamwork

One of the business owner skills that’s most overlooked by small business owners is knowing when you can’t do it alone. Building a business can be a lonely and often misunderstood journey, and trying to do it all alone is a monumental task. It’s no wonder 34% of small business owners were reportedly diagnosed with mental health issues in 2024.

While a key trait of a small business owner is their ability to trust themselves, there is time for specialist advice. The right business partner or adviser can make a world of difference, and hiring the right people is essential. Knowing when it’s time to form a team of experienced people with specialised knowledge can become the difference between success and failure.

Talk to a Financial Advisor Today

Our financial advisors have the knowledge and skills to help in matters such as business structuring, personal property ownership strategies, and adequate insurance coverage. If you’re running a small business or looking to grow the right way, we can help you set everything straight from the start and put you on a path to financial success.