There are many reasons why entrepreneurs decide to go into business for themselves. Some love the freedom – despite the additional work – that owning a business provides. Others find value in giving back to the community by filling a particular niche that was not being filled prior.

Some simply want to earn a buck or two, and be successful as a result. Regardless of what motivates somebody to go into business, that business will ultimately sink or swim based on the quality of leadership within it.

What particular elements of running a startup company are affected by leadership? We’ll review exactly why good leadership is vital for startup companies so that you can prepare and learn.

Because it reduces friction

Startup companies are inevitably going to be laboratories for human interaction. The idea of bringing multiple people together under the same roof, with no prior working experience with one another, means that a quality leader is necessary to drive change and ensure things get done.

Order must be established within the workplace, or else employees will find themselves competing with one another and undermine one another in unhealthy ways. Many great leaders have pursued formal education in areas where leadership is taught.

This can be anything from having obtained an Ed.D online to having your bachelors degree in communications. At the end of the day, a good leader must be able to smooth over differences within the workplace if a startup company is to succeed.

Because most businesses fail

Startup companies have to deal with a variety of unique challenges. First of all, the facts: eight out of ten businesses inevitably fail within the first eighteen months, according to Forbes.

Any entrepreneur who wades into the world of business – statistically-speaking, at least – is doomed to fail. Of course, there are many reasons why businesses succeed and fail, but the ability to navigate these difficult situations ultimately falls on the leadership of the company to expect these challenges.

This is why good leadership is so important: with odds like these, you need every variable possible stacked in your favor. Among the startups with the best leadership styles and strategies implemented, far more than 20 percent of them succeed.

Because a leader brings it all together

You may have a great idea. Perhaps you have the best idea ever conceived. As a startup, the conditions are unforgiving – even if your idea is excellent.

Leadership within a startup company determines how well each idea is researched, whether or not specific plans – marketing, R&D, accounting, and much more – are integrated with one another to make things work, and of course, how the team manages to integrate these ideas into the product or service.

Various elements of expertise – event planning, budgeting, marketing, etc. – are synonymous with leadership. You may have a great idea, but that means absolutely nothing in the world of startups until a great leader brings all of the elements together.

Because bosses don’t build businesses

Anybody who has ever worked for another company understands the role of the boss. The boss is there to make sure that the day-to-day business operations are carried out in the way in which they’re supposed to be done.

However, a startup company does not have a “business as usual” routine yet set in stone, meaning that a boss is effectively useless in this context.

What a startup needs is a leader who can read between the lines, anticipate potential problems before they arise, inspire hope among employees and otherwise be a builder rather than a bosser.

Because employees need a leader

Not everybody is a born leader. In fact, most people prefer to follow the orders of one. This means that – whether you intended to be or not – embarking on an adventure in the form of a startup means that you must become that leader.

Employees not only need guidance, they expect it. Having someone who can clearly explain the goals, tasks and reasons for doing something to a company’s workers makes it easier to get things done.

It improves efficiency, which ultimately increases your chances for long-term success. Without a leader at the center of a startup, the company is more likely than not to fail very quickly.

Leadership is vital for startup companies for a variety of reasons. Most people are followers and therefore need that leadership to thrive. Leaders help shape startups rather than mere bosses.

Leaders know how to make sure each confusing piece of the puzzle is put together in the right way. With so many businesses prone to failure, the qualities of leadership may be all that makes a difference between success or closed doors.