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5 Traits of a Great Small Business (3:22)

When I was growing up in Southern California my dad owned 1 carpet store and then he turned it into 2 and then 4 and then eventually 15 or 16 carpet stores. When I was about 7 years old I had to write a story about what my Dad did for a living and I couldn't really wrap my little brain around retail carpet store owner. It wasn't like a lawyer or a doctor, so I said, "Dad, what do I tell them? What do you do for a living?" He said, "Well Stevie, I'm an entrepreneur." I had never heard that word before. An entrepre-what? He said, "Well that's a person who's willing to take a risk with money to make money." A person willing to take a risk with money to make money.

In the years since then I've decided that's probably about the best description of entrepreneur I've ever heard, and in fact when you talk about small businesses the very best small businesses really understand that idea.

What I want to talk about here for a second are the 5 traits of a great small business. Not a good one, not a fine one, but a great one. The first one is that thing I was just talking about. The willingness to take a risk. If you're going to really create something special in your business you have to be willing to take a risk. Not a crazy risk. The best entrepreneurs, the best small businesses, take smart, calculated risks. If you want to get to the next level you're going to have to take a smart risk.

The second trait of a great small business is that it has a great team. When, for example, you look at venture capitalists and they're looking to fund a business, what do they look for? Inevitably what you hear them talk about is what they look for is the management team. You want to see the qualify of the people running the business, and that's true for any small business, not just the ones who end up getting VC money, but any small business that strives to be excellent. That strives to be great has to create a great team as part of that business.

What does that team do? Well that's number 3. What that team does is it works hard and it plays hard. There is a time to work and everyone gets it, and there's also time off. There are some employees and some employers who work way too hard. They don't know when it's time to take a break. The best small businesses know that there is a time for work, a time for play, and they delineate the two.

The fourth trait of a great small business is that they're innovative and creative. What I hate are those businesses, and I bet you do too, where it's "I pay you this and you give me that, and you give me that and I'll pay you this." Terrible and boring. Great small businesses create, they innovate, and they try new things. Some of them work, some of them don't. They take a risk, the risk pays off, sometimes it doesn't. What happens is eventually and inevitably you get to the next level. Now that's from taking smart risk taking and being creative and innovative.

Then finally the up shot of all this is the best small businesses are about more than money. Hey look it. Do you like to make money? Of course you do. I do. We all do. Profit is great, but what's almost more important than profit in the best small businesses is they have values that are really important to that business. They are trying to create something bigger than just a little profit making machine. They're trying to create something of substance and of value for themself, for their employees, for their customers, and even sometimes for the world.

Those are the 5 traits and if you look at them I think adopt those in your business and it can make a huge difference.