Owner vs. CEO vs. Chief Employee
Good news / bad news:
You and I have the power to win or to lose. We can create a business of extraordinary power, or… Some 500,000 of us end a small business each year, mostly because we just give up. What an amazing movie! It has multiple endings, a cast of thousands, and you and I have a starring role!
Here are some “truths” about small businesses, yours and mine.
1. They’re defined by an idea that appeals very much to you, or to me.
2. They’re usually run without a detailed and well thought-out plan.
3. 3. Owners frequently work twice as hard for half the money as when they were employees.
How are you different from the usual small-business owner? Which of the “truths” above don’t apply to you?
Schedule: I’m going to publish this newsletter monthly. I’ll try to include tips for the businessperson who’s up and running, and for those who are still in the planning stage.
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Tip #1 – Owner vs. CEO vs Employee – how do you manage being all three!
Would you, as an owner or CEO, keep you on, as an employee? My compliments to John Hajisava of http://globalresultsunlimited.com for expressing the concept (and for trying it out on me!)
1. You need to see yourself as a company. You first are the owner. “Owner” means you have money in the business and you want more money out. So you the owner measures each month in terms of return on investment. What did I put in? What did I get back? For many entrepreneurs these are unpleasant questions. But you have to face up to them each month or each year to determine the value of what you own. Did a friend, relative or bank put up some money? They’re asking the same questions, aren’t they! You need monthly answers. It’s the owner’s business to know what’s so. Are you working between 1-4 hours a week as an owner?
2. You need to see yourself as a CEO. You have a vision of what the business can become, a mission, complete with short and long term goals, and a purpose (which last may not be entirely about money.) You are responsible for all the strategies and tactics of running this business, from Marketing and Sales to Accounts Receivable and Accounts Payable. Are you working from 5 to 10 hours a week as a CEO?
3. You need to see yourself as the key employee and manager. You are doing most of the work, or making sure it’s getting done. Has the owner provided enough money? Has the CEO created a vision which lights you up, and provided goals which you are striving for? Are the working facilities and personnel adequate to the task. And have you noticed that, as an extremely close relative to the Owner and CEO above, that you take advantage of that relationship and don’t work hard for 40 hours a week.?
Sounds like the Three Faces of You, right?!
Here’s how you get all those personalities to work for the one of you.
1. Agree (with those other guys) that money is the primary reason for being in this business. Be very careful about the CEO who wants to make the world a better place. That rarely pays and is often a cover for not having a clue on how the business is going to work.
2. Create a very simple monthly report. Call it the Owner’s Report. It will include:
* Capital on hand
* Income
* Outgo
* Income – Outgo = Profit or (Loss)
* It can include projections for future months.
3. Create/revise your business plan. I’m assuming that you got started without much of one and have managed OK. If you’ve taken my teleclass you have a 9-point worksheet, if you’ve taken my full course, it’s much more detailed – and the good news is that you’re brilliantly started. But a bank is going to want to see from 20 to 40 pages worth of detail. Half of the plan is going to say in words what’s happening and what will happen. Half of the plan says it with numbers. If you suddenly hear a conversation about “I didn’t start my own business to be a slave to the numbers,” give that “employee” a kick in the ass and tell him to grow up or get out!
