Have you ever wondered who’s the CEO of your small business? Is it you or someone else? If you’re a founder, are you really the CEO or just one of many leaders? How does your role as founder differ from your role as CEO, and how do those roles affect your ability to influence the direction of your small business? These are all important questions that may have never crossed your mind before, but if you can find an answer to them, you can learn some valuable lessons about leadership and management that will help you in the future.
What are the key responsibilities of a CEO in a small business?
A CEO of a small business is responsible for setting the overall strategy and vision of the company, making major corporate decisions, managing the company’s resources effectively, building and maintaining relationships with key stakeholders, and ensuring the company’s financial health and growth.
Here are a Few Interesting CEO Facts and Statistics
- The CEO title is one of the most common titles to use in the business world.
- The term “CEO” was first used in a Harvard Business Review article published in 1960 by Max Danish and William Gorvine as an abbreviation for “chief executive officer.”The term “CEO” was first used in a Harvard Business Review article published in 1960 by Max Danish and William Gorvine as an abbreviation for “chief executive officer.”
- As of 2023, chief executive officers earn a median of $189,520 per year, according to the U.S. Bureau of Labor Statistics (BLS).
- At Ohio University, you can study online and complete an MBA in as little as two years while working, pursuing promotions or growing your business.
What is a Founder vs. Chief Executive Officer (CEO)?
All small businesses start with an idea and are driven by someone who wants to see that business succeed. That founder or entrepreneur does many different things in their quest to bring their idea to life. However, one very important distinction comes when it’s time for that small business to hire staff and create a team – at that point, is it still appropriate for the founder to be referred to as CEO? Some people think so; others aren’t so sure. Let’s take a look at both sides of the argument.
How to Become Both or Either
CEOs are in charge of all things business. If you want to grow your business and build a great culture, you need to focus on being a title CEO (Chief Executive Officer). But here’s where you might be surprised: The same is true if you decide to go into business for yourself; many times, small business owners don’t want the day-to-day distractions that come with management responsibilities. The truth is, when it comes to running your own company, it doesn’t really matter what position or title you hold—because whatever responsibility falls in your lap as an entrepreneur will be yours alone to take care of (and fix). What matters is what kind of leader you can become as your company evolves.
It takes time and experience to get there, but every step you take along the way gets you closer to becoming a successful entrepreneur. So instead of focusing on titles or positions, work hard at developing your skills as a leader. That way, no matter what role ends up falling under your job description down the road, you’ll be ready for it!
Do I Have to Wear Both Hats?
The CEO position in a small business is all-encompassing. As a leader, you’re literally everything from writing and signing off on checks to approving social media posts. That’s great if you can handle being both hands-on and strategic at once, but it’s simply not realistic for many people (and for most early-stage companies). Suppose you don’t have either the time or desire to tackle every aspect of your start-up full-time. In that case, there are ways to effectively scale back your responsibilities as CEO—without giving up ultimate authority.
For example, adding members to your board of directors can help you delegate tasks that aren’t core to what makes your company unique. Or by bringing on an executive team member who handles day-to-day operations while still reporting directly to you. While these solutions may seem like they’ll take away some control over your company, they actually give you more time and energy so that you can focus on what matters most: growing and scaling your brand into something sustainable. The CEO role is only one part of a start-up—and it doesn’t have to be yours alone.
What if I Don’t Want to Wear Both Hats?
When you’re young and have no experience, it can seem like one person must fill every role. But when your company grows, there will be a time when you don’t have enough human resources to make things happen. Sooner or later, you’ll realize that it makes more sense to outsource certain jobs than it does to waste valuable time doing them yourself. At that point, choose someone with expertise in those areas and give them their own job title. They might not be able to make sales calls or do social media marketing as well as you can—but they won’t need to. That frees up your time to focus on what matters most: growing your business.
But… I Don’t Even Know How to Do Those Jobs!
The term CEO tends to conjure up images of corporate suits running giant organizations, such as large corporations. But in a small business, you don’t need to do everything yourself—and it might be a bad idea if you try. As any company grows, especially from one employee to several, it needs specialized talent and experience in specific areas. In order for your business to succeed (especially as you scale from start-up to later stage), you need people who have expertise in their particular field—whether that’s marketing, finance, or human resources.
It’s important to recognize what you can do well and what others can do better than you. If you want to be an effective leader, delegate tasks accordingly so everyone knows what they are responsible for. That way, when something goes wrong with your business, there is no finger-pointing because each person knows exactly what they are supposed to do. When hiring new employees, look for someone with strengths in an area where you feel weak—that will allow them to contribute more fully while also helping build out your team’s capabilities. And if you hire people who have skills that are greater than yours, consider yourself lucky—you just hired a great employee!
There may come a time when you need to take on a different role within your company as it grows (like moving from being a hands-on manager to overseeing managers). While it might seem scary at first, taking on a new role can actually help keep things fresh and exciting. Plus, it gives you more time to focus on those areas where you really excel.
Who Will Do All of These Tasks for Me?
So, who is really running your business? That’s an important question to ask yourself as you chart your career path. If you want to be a small business owner, you will have to do it all, including managing budgets and ensuring continuous cash flow. The day-to-day work of a small business owner entails everything from operations and marketing to accounting and customer service. At least one small-business expert says many owners are ill-equipped for their role, whether they’re unprepared for running payroll or balancing sales with much money.
According to Kathy Gurchiek, coauthor of 101 Tips for Running Your Own Small Business, being a small-business owner isn’t like working on Wall Street, where there are other people around whom you can lean on when tough decisions must be made. As a result, she believes that too many small-business owners make poor choices because they don’t understand how their company works financially. She says they don’t know what’s going on in terms of revenue versus expenses.
They don’t know what’s going on in terms of profit versus loss. In short, if you’re looking to become a successful entrepreneur, it might be time to stop thinking about starting your own sole proprietorship and start thinking about becoming an entrepreneur instead. It may sound like semantics, but understanding that distinction is critical for success, according to Gurchiek.
What If I Can’t Manage My Busy Schedule and Wear Two Hats at Once?
A lot of people who are just starting their own businesses think that they have to wear both hats at once—the one that says CEO and founder. But, in fact, it’s not ideal for your business (or you) to be stuck playing dual roles. This is especially true when a business is growing quickly and you need to hire employees or outsource certain functions. It can get tricky trying to play both roles at once, and even if you can manage it, you’re risking burnout down the road. So, how do you know if your company needs an outside CEO or if you’re up for handling everything yourself? Here are three factors to consider.
- Is there money involved?: In most cases, hiring someone to oversee operations isn’t really an option until there’s some sort of investment involved. If you’ve raised capital from investors or gotten a loan from a bank, then having someone else run day-to-day operations makes sense because it allows you to focus on strategy and big-picture goals. Hiring someone else might also make sense if sales start coming in regularly enough that cash flow becomes more important than profits since it will help your business survive its early years when profits might not be as high as expected. On the other hand, if sales aren’t steady yet but revenue is expected soon enough, then going solo might make sense because growth may happen fast enough that you won’t have time to hire anyone anyway.
- Do you want to grow your business?: If you don’t plan on expanding much beyond where it is now, then hiring someone else probably isn’t necessary. However, if expansion seems like a possibility or likely outcome within a few years, then bringing in another person to take over operational duties could be helpful.
- Do you want control over all aspects of your business?: Some entrepreneurs like being able to call all of their own shots and hate relinquishing control to others no matter what kind of expertise they bring with them. For those types of founders, bringing in an outsider might feel too much like giving up power and control over something that was yours from day one.
Ultimately, whether or not you should hire someone depends on your personal preferences and expectations. The bottom line is that it’s always good to have options, so if you find yourself getting burnt out or overwhelmed by managing multiple areas of your business alone, then it might be worth considering bringing in an outsider to fill in any gaps.
Conclusion
Because your day job is more than likely keeping you busy, it’s easy to put a lot of extra pressure on yourself. Make sure you remember that—as well as remember that your small business needs a leader, not a dictator. Many people are surprised to learn that 90% of CEOs in small businesses are part-time or have outside employment. Don’t go into business expecting to be able to shoulder everything singlehandedly. From day one, know what you do and don’t do well, and find people who can fill in where you need help; they might not even be part of your company yet! The most important thing for any small business owner is to stay realistic about their responsibilities and abilities. The second most important thing? Have fun with it!
