Personal Growth

Why Self-Awareness Is Important and How It Can Impact Your Business

why self-awareness is important
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Self-awareness has been called the cornerstone of emotional intelligence. Yet, it’s often overlooked by most of us. In fact, research shows that only 10%-15% of people are genuinely self-aware.

Why do you think that’s the case? Well, it‘s because focusing on metrics and tangible goals is much easier.

But having self-awareness can give you a significant edge as an entrepreneur. Not only can it positively affect your business, but also improve your relationship with clients and team members.

Let’s discuss the importance of self-awareness in business and some of the best practices you can do.

The Basic Concept of Self-Awareness

why self awareness is important in your business - a woman looking at herself in the mirror

According to the Harvard Business Review, there are two types of self-awareness – internal and external. 

Internal self-awareness is when you understand yourself. That includes your emotions, strengths, and weaknesses. 

For instance, when you’re too stressed, you know you get easily distracted and can’t make any good decisions. 

Meanwhile, external self-awareness is about being conscious of how others see you. Let’s say you are straightforward, and you love that trait. But you try to control it as it makes people around you uncomfortable.

In addition to the two types of self-awareness, the article introduced the following four models.

  • Introspectors – people who fully know their inner selves but don’t accept external feedback.
  • Pleasers – those who are overly concerned about how other people perceive them. 
  • Seekers – people who are still finding themselves. They are unaware of both how they feel and how they’re seen. 
  • Aware people – the opposite of seekers. They are in tune with themselves and value the perspectives of others. 

Which of these models do you think you belong to? Knowing where you stand can help improve your self-awareness, directly impacting your business success.

How Self-Awareness Can Impact Your Business


One of the most crucial areas where self-awareness plays a considerable role is in decision-making. 

When you understand your emotions and thoughts, you make choices based on logic, not impulses. 

Let’s say you’re on the cusp of making an important business decision that will majorly impact your company. Being self-aware allows you to step back and thoughtfully assess the calculated risks this decision will bring to your business.

Or if you’re thinking of launching a coaching business. Having the right mindset and self-awareness is crucial in constructing a strong foundation. 

Team Dynamics 

A self-aware business owner is a better team player. 

Collaborations become smoother by knowing your communication style and how your team members work (their reactions, weaknesses, and strengths). 

For example, let’s say you’re more of a straight shooter in team meetings. You think it’s more efficient and gets your point across quicker. But you’re also picking up that you’re not really building the kind of rapport you’d ideally like to have with your team. You find they’re not as engaged as you’d like. 

This is where self-awareness comes into play. You recognize that your communication style is not quite resonating with this particular team, so you adjust accordingly to improve overall communication and rapport. 

Productivity and Time Management 

Being self-aware can boost productivity and improve your focus. You are aware of your areas of strength and areas where you need additional support. 

You may be a natural at coaching clients but struggle with social media marketing. Instead of wasting your precious time on tasks that you can outsource, focus on needle-moving activities that will grow your business.

Emotional Resilience 

Life and business can be full of ups and downs. One of the benefits of self-awareness is that it helps you gain emotional strength to bounce back from setbacks. 

For example, when encountering a setback, you can objectively assess what went wrong, learn from this experience, and move on. 

Client Relations 

Your clients are the beating heart of your business. Whatever business you are in or would like to be in, you are in the people business. And having self-awareness can be tremendously advantageous when it comes to serving people.

It allows you to serve your clients better, thoughtfully accept feedback, and be more cognizant in terms of building trust and rapport.

Ways to Become More Self-Aware

Now that you know how it can significantly affect different aspects of your business, it’s time to learn how you can improve self-awareness. 

Reflect to Understand Your Emotions 

a woman meditating to improve self-awareness

Sometimes, we’re so busy with our day-to-day that we forget to check in with ourselves. I get it. The daily grind and endless to-dos can really drain us, and we just want to finish everything and rest.

However, reviewing our daily actions, decisions, and feelings can bring valuable insights.

There are many ways to reflect, but you can first practice mindfulness through meditation and journaling. Starting your day with healthy habits can significantly improve your self-awareness.

Seek Feedback 

Some of us think we’re pretty self-aware, right? But sometimes, we’re too close to the painting to see the full picture. That’s why stepping back and getting a different perspective is crucial. 

You can reach out to 3-5 close friends who genuinely want the best for you. Maybe even ask a couple of work buddies if you aim to be a better leader. Their feedback can reveal facets of yourself you didn’t even know existed and help you flourish. 

Be Aware of Your Triggers and Glimmers

Understanding what makes you tick – in both good and stressful ways – is like having a personalized guidebook for decision-making. 

When you’re aware of this, you can better steer your actions to suit your wellbeing. 

For instance, you know that client calls energize you, while admin tasks sap your energy. Knowing this empowers you to arrange your schedule smartly. 

You could block off time post-client calls to tackle the admin work. That way, you’re riding on the wave of energy you get from the meetings so you can deal with daunting tasks less painfully.

Establish Boundaries to Protect Your Time 

increasing self-awareness by establishing boundaries - a man closing his laptop when the clock hit 5 pm

What’s the point of knowing your triggers and glimmers if you don’t take action, right?

If checking and answering emails after 7 p.m. disrupts your family time and increases stress, then make a rule to disconnect your gadgets post-work and enforce this boundary.

Mastering this skill strengthens how you manage your business, personal schedule, how to  deal with demanding clients, and prevent burnout.

Self-Awareness Is Your Secret Weapon

Being self-aware means understanding who you are and how others see you. It not only brings about positive personal growth, but self-awareness echoes through how you conduct your business and its impact on your success.

Remember, self-awareness leads to smarter, thoughtful decisions, better team dynamics, and improved client relations. 

It’s also linked to resilience and productivity. So, if you’re looking to elevate your business and leadership, make self-awareness a top priority. 

Your future self and your business will thank you for that. 

We’d Love to Hear From You! 

How has self-awareness influenced your business journey? Share your personal experiences and thoughts below. Let’s keep this conversation going! 

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