3 Leadership Styles Every Entrepreneur Needs to Grow Their Team
When we think about entrepreneurship and leadership, the two are inseparable. An entrepreneur can have the best ideas and strategies in the world, but without the ability to lead people, those ideas will rarely come to life. Leadership is what drives vision into reality, motivates teams, and creates the foundation for sustainable growth.
But here’s the truth: there is no single "perfect" leadership style. The most effective entrepreneurs know how to adapt their leadership to fit their team, their industry, and the unique challenges of the moment. In this blog, we’ll explore three essential styles of leadership in business that every entrepreneur should embrace to grow their teams.
These leadership styles aren’t just theories - they are practical approaches you can implement right away to strengthen your influence, build trust, and unlock your team’s potential.
Why Leadership Style Matters for Entrepreneurs
Before diving into the three styles, it’s worth asking: why should entrepreneurs care about leadership style at all? After all, isn’t leadership about charisma and vision?
Not exactly. Leadership style determines how you communicate, how you make decisions, and how your team feels about working with you. The way you lead can mean the difference between:
A motivated team that believes in your vision
Or, a disengaged team that’s just “doing the job”
As an entrepreneur, you’re not just managing processes — you’re shaping culture, setting direction, and guiding your people through uncertainty. Your chosen leadership style becomes the lens through which your team interprets your actions.
In short: mastering different styles of leadership in business makes you adaptable and more capable of growing a strong team.
1. Transformational Leadership: Inspiring Vision and Growth
Transformational leadership is often described as one of the most powerful leadership styles for entrepreneurs. Why? Because it’s all about inspiring people to go beyond their limits and buy into a bigger vision.
Entrepreneurs who use this style focus on motivating their teams through:
Clear vision: Painting a picture of the future that excites people.
Personal development: Helping team members grow their skills and confidence.
Innovation: Encouraging creativity, experimentation, and risk-taking.
Why Transformational Leadership Works in Entrepreneurship
Entrepreneurship and leadership go hand-in-hand when it comes to vision. A transformational leader doesn’t just manage tasks - they ignite passion. In a startup or growing business, your team needs to feel like they are part of something meaningful.
For example, if you’re launching a new product, a transformational leadership approach would focus on reminding the team of the bigger “why” behind the product, not just the deadlines. When people believe they’re working toward a mission, they are more engaged, loyal, and willing to go the extra mile.
How to Practice Transformational Leadership
Communicate purpose often: Tie every project back to your company’s mission.
Invest in your team’s growth: Offer training, mentorship, and career pathways.
Celebrate creativity: Encourage ideas and recognize contributions publicly.
If you want your team to rally behind your vision and innovate alongside you, transformational leadership is essential.
2. Democratic Leadership: Empowering Collaboration and Ownership
Another highly effective style of leadership in business is democratic leadership. This style emphasizes participation and collaboration in decision-making. Instead of being the only voice in the room, a democratic leader invites input, encourages dialogue, and empowers people to share their expertise.
Why Democratic Leadership Works in Entrepreneurship
Entrepreneurs thrive in dynamic environments where agility and adaptability are critical. No one person has all the answers and that includes the founder. Democratic leadership creates space for collective intelligence, ensuring that your team feels valued and that decisions are more well-rounded.
This approach is especially powerful for small businesses or startups, where innovation often comes from brainstorming and experimenting. Employees who feel heard are more likely to take ownership of their roles, contribute proactively, and stay engaged.
How to Practice Democratic Leadership
Encourage feedback loops: Regularly ask for team input on projects and processes.
Run inclusive meetings: Make sure everyone has a chance to speak, not just the loudest voices.
Share decision-making power: Let team members lead projects or own specific initiatives.
By adopting democratic leadership, entrepreneurs send a clear message: “Your ideas matter.” This boosts morale, builds trust, and creates a culture where people want to contribute.
3. Situational Leadership: Adapting to the Needs of the Moment
While transformational and democratic leadership are powerful, they’re not always the right fit for every scenario. That’s where situational leadership comes in.
Situational leadership is all about flexibility. Instead of committing to a single style, entrepreneurs who adopt this approach adjust their leadership depending on the circumstances and the needs of their team.
For example:
If your team is facing a crisis or tight deadline, you may need to adopt a more directive approach (clear instructions, quick decisions).
If your team is experienced and motivated, you can lean into a delegating style (trusting them to run with projects independently).
Why Situational Leadership Works in Entrepreneurship
Entrepreneurship and leadership are full of unpredictable moments. One day you may need to be hands-on, and the next, you’ll need to step back and let your team lead. Situational leadership ensures that you’re never stuck with one approach that doesn’t fit the reality of your business.
It also shows your team that you understand their needs. A new hire may need more guidance and structure, while a senior employee may thrive with autonomy. Adapting your style creates a balanced environment where everyone can succeed.
How to Practice Situational Leadership
Assess your team’s needs regularly: Evaluate skill levels, motivation, and confidence.
Be willing to shift roles: Sometimes you’re a coach, sometimes you’re a director.
Stay self-aware: Notice when your style isn’t working and adjust accordingly.
Situational leadership gives entrepreneurs the agility they need to navigate challenges without losing their team’s trust and momentum.
Which Leadership Style is Best for Entrepreneurs?
Here’s the secret: it’s not about picking just one. The best leaders know how to blend and adapt these styles depending on the situation.
Transformational leadership sets the vision and inspires your team.
Democratic leadership brings people into the process and builds ownership.
Situational leadership allows you to pivot based on circumstances.
When entrepreneurs learn to balance these styles, they create resilient, motivated, and high-performing teams.
Final Thoughts: Leadership as the Core of Entrepreneurship
Entrepreneurship and leadership are deeply intertwined. Building a successful business isn’t just about strategy or funding - it’s about people. And the way you lead those people will determine whether your vision thrives or fails.
By embracing transformational, democratic, and situational leadership styles, entrepreneurs can grow their teams in meaningful, sustainable ways. These styles of leadership in business aren’t rigid frameworks; they’re tools you can adapt as your business evolves.
As you reflect on your leadership journey, ask yourself:
Am I inspiring my team with a clear vision?
Am I creating space for collaboration and ownership?
Am I flexible enough to adapt my leadership when circumstances change?
Answering these questions honestly is the first step toward becoming the kind of leader your team wants to follow. And when your team is inspired, empowered, and supported, your business is set up for long-term success.