Statistics are not friendly when it comes to small business. It’s estimated that 50% of small businesses fold in their first year with as high as 96% failing within 10 years. Those statistics are often used as a cautionary tale for new entrepreneurs. Be careful, tread lightly, keep the day job, watch expenses like a hawk because chances are, this thing isn’t going to work out anyway.
I’m sure every entrepreneur has had those conversations with well meaning friends and family. Those conversations fuel the type of thinking that leads to the death of small businesses. There are many reasons why small businesses fail. However, the most common reason is that no one is acting as the CEO of the business.
Role of the CEO in a small business
The CEO holds the vision for the future of the company. The CEO is responsible for growth, inter departmental communication, and overall performance. Check out my article What is the CEO responsibility in a small business to learn more.
Common flaws of the small business owner
Most small businesses owners lack long term vision for their company. They have an idea of what they want their business to provide for them. But the plan for growth is usually non-existent. The business owners spends the majority of their time managing the day to day responsibilities of the business. The small business owners frequently has ideas for business growth. But they never seem to find time to implement them.
How to become a CEO in your Small Business
Step 1: Learn the responsibilities of a small business CEO
Step 2: CEOwner: managing the roles of CEO and business owner
Step 3: Transition to full time CEO
What is a CEOwner?
CEOwnership is how to become a CEO in your small business. It’s the transition step. It’s the season where you build structure and support in your business so that you, the owner, can spent your time in CEO responsibilities.
The first change to become a CEO in your small business is in how you think about your business.
A CEO knows that
- You don’t make money when you provide your core service. You make money when you sell the service. Fulfilling on the service is actually a cost to the business. Think about it. If you run a massage therapy business and have to pay a massage therapist to perform the massage, when do you make money? You earn when the client purchases the massage. During the actual massage, you are spending money because you are paying the therapist to perform the service.
- Marketing never stops. A small business needs to have a source for incoming leads at all times.
- Your customers need to be willing to work with someone other than the business owner. I hear from many small business owners, “But my clients love working with me. They wouldn’t pay to have someone else work with them.” What I hear is, “I’ve never created curriculum, standards, or a path for anyone else to succeed in working with my clients.” When I work with a big brand, I am not expecting to work directly with the business owner.
- A business cannot function and grow without systems in place. Too often the company processes and systems are held within the brain of an individual. It could be the business owner, or a really great employee. But without that person, the company could not function. That scenario drastically limits growth.
How to become a CEO in your small business is a question many business owners are struggling to answer. The reality is, every business needs a CEO. It’s a critical role. And many small business owners simply don’t understand business. They know their product or service. They don’t know how to run their company.
It’s time to make a commitment to your business. Learn how to be a CEOwner. Learn how to balance the day to day needs of the business with growth creation projects.