There are many critical factors that will determine whether a small business is successful or not, but one of the most important is the leadership exhibited by its owner. In this competitive environment, business fortunes can rise or fall quickly, in direct correlation to the owner’s management techniques. Naturally, you need to have good people working for you, but it all starts at the top.

If you possess superior management skills, your employees will function better and therefore accomplish more. Conversely, no matter how efficient you are in completing your own tasks, the business will suffer if you don’t provide leadership for others.

What sort of management style are you using? There are three basic types: aristocratic, paternalistic and democratic. As the names suggest, the individual style reflects the manner in which you treat your workers.

1. Aristocratic style: An aristocratic manager rules with an iron fist. Usually, he or she cannot be swayed by other employees from following a predetermined course. The owner might not actually say, “it’s my way or the highway,” but actions speak louder than words.

It should be noted that the aristocratic management style has some benefits—for instance, it can result in quick decision-making and a steadfast pursuit of excellence—but the detriments are obvious. Most important, employees generally will not want to work under these conditions, and their performance will often reflect their disenchantment. Accordingly, the aristocratic style is not as common as it once was.

2. Paternalistic style: With this type of approach, the manager expresses greater concern about the welfare of workers. In fact, the business owner may act more like a “father” or a “mother” than the person in charge. Frequently, the owner will go so far as to put the interests of the employees ahead of the success or failure of the company.

Although some employees enjoy working for paternalistic managers, others may find it condescending or uninspiring. Again, this management style is more indicative of days gone by and is largely disappearing in the current business climate.

3. Democratic style: In contrast, the democratic style of management appears to be gaining in popularity. A democratic manager empowers employees to make more decisions on their own. Employees can grow on the job, but they are also likely to make mistakes. The manager’s intention is that they learn from these mistakes and make the necessary adjustments.

The democratic style requires managers to show more faith in employees. It can be beneficial in the future, but could create short-term problems. Employees may be slow to make decisions on their own. Even worse, a significant mistake by an empowered employee could be devastating to the company.

Clearly, there is no “right” or “wrong” method. You should find the management style that best suits your personality and your business needs. It may be sensible to combine elements of all three styles, or at least two of the styles, into a singular approach. In any event, remember that employees are looking for you to show the way.