There is no manual out there for how to be a leader. It's not like you can sit down one day, read a 30 page book, and go to work the next day as a natural born leader. The thing is, though, as cheesy as it may sound, the ability to lead is in all of us. Sure, we all may not have the same types of leadership skills, but we have some leadership skills woven into our DNA. Maybe you are better at being the kind of leader that uses positive reinforcement to get the job done. Maybe you are the kind of leader that is stern yet fair, which gains their respect. Or maybe you like to combine different methods in order to get the job done. Whatever the way you do it, you can take the reign and lead your staff even if you open up your own small business.
So what is the best way to show leadership when you are in charge of a small business? The key is to just be yourself. The worst thing you can do when it comes to your employees is to try and be someone that you are not. Trust this, they will see through your facade quite quickly. Not only does doing that mean that people won't trust you, it also means that they won't follow anything that you say. Leadership, ultimately, comes from trust and respect. If you are one of those people who love to rule with an iron fist, be sure that you are at least honest with it at all times.
When you are running a small business, one of the most important things you can do is to show leadership by example. If your employees see you working hard they will follow your example. If the employees see that cost reduction is not a word in your dictionary then get ready for a high cost billings. If you are investing in a new division/business that gives you zero income at the end of the year yet you are bearing the cost then you’re not a wise but an emotional leader. With that said, you need to treat them well. Your employees are there to help your business, treat them professionally at all times and don't be afraid to reward them when they do something right and show the yellow card when not.
So there you go: be yourself, be professional, and, no matter how you do it, be realistic. When you run a small business you need to make sure that your leadership skills help the business, not hurt it.