There is a dilemma small business owners face when they cannot move to the next stage of their own growth. This tension between where a small business owner wants to be and the health of the business is often based on limitations of such as financial, staffing and leadership. So, when is your small business not ready for you to be CEO? And how do you prepare it so it is ready?
There is what you want to be and then there is what you have to be. One of my clients knows he would be a great chairman but his business isn’t ready yet for him to step away from actively leading his company through its current growth stage. Another client tells me he hates doing his administrative tasks but there isn’t enough money to hire a much needed administrative assistant. Just these two stories are typical of so many small business owners who are using the CEO Mindset but have limitations regarding just how much they can act as the leaders and strategists they know they truly are.
Before we go any further, what is a CEO?
The role of CEO and small business owner parallel each other quite a bit. They both are responsible for:
- Setting the vision and tone of the whole company
- Designing the strategy of how the business will develop over time
- Seeking talent through hiring, outsourcing or collaborating with complementary professionals
- Keeping self and others accountable to the stated business goals
- Knowing “cash is king’ and keeping revenues are stable, growing and making a profit
As we take a closer look, it is clear that a CEO and a small business owner are more synonymous than we give them credit for.
Related post: What is a “Real” Business Owner Part 2
Signs when your small business isn’t ready for you to be CEO
In your head and heart, it is time for a more sophisticated role. However, there are warning signs to signal when to stay put in your current role.
You are feeling uncertain about how to be leader and manager for your business’ next stage
Your company, even when you are a sole trader, depends on your ability to manage yourself — monitoring your own emotional responses, developing confidence in your own authority, communicating effectively while integrating your work and personal life.
Inconsistent or lack of detailed knowledge of the company’s financials
This topic alone could be a stand-alone blog post but, simply put, a lack of a stable foundation, a shortfall of expected earnings or poor accounting can stifle business growth and keep you from stepping into the role of managing director.
Your small business will never be ready for you to be the CEO if the plan is in your head. Without a clearly communicated and written plan shared with your staff, it is hard for you to focus on business development, attracting investors or increasing visibility through networking, speaking engagements or conferences and trade shows.
Lack of personnel
Sole traders already know that if they don’t do the work, it doesn’t get done. In addition, there are microenterprises that need everyone to do the work of product/ service development, marketing, customer service, administrative tasks and more. Controlling the pace of growth and weighing the quality of current opportunities will support a positive workplace and avoid adversely affecting stress levels.
If you are noticing these signs, it is time to stop, regroup and review. There are times when a small business must focus on the basics to stay viable while, at other times, there must be careful management to avoid growing too fast without the right supports in place. The review (which could include a SWOT analysis) spells out the current state of the business and what needs attention.
Related post: 10 Reasons Why Small Businesses Fail
When what you want to be and what you have to be are at odds
For many small businesses, there can be a combination of difficult external and internal circumstances slowing or stopping business growth. It is not unusual for small business owners to find themselves chafing at the thought that “this business could be so much more if I could (fill in the blank)” instead of ploughing through the everyday must-do’s. With some pragmatism, grit and perseverance, you can prepare your small business for the time when you can be CEO.
6 ways to prepare your business
# 1. Learn to manage yourself
Regardless if you are trying to stay afloat, rebuild your business or shepherd a big growth phase, the way you manage the emotional side of your business is a key factor. Not handling your stress level well can hurt your ability to analyse information, make decisions and act effectively. This also includes using good (and personalised) time management skills and avoiding procrastination.
# 2. Develop an informal or formal group of advisors
You can make yourself crazy going round and round trying to analyse choices, particularly when you don’t like any of your options. A formal or informal advisory group can help expand any possible tunnel vision, refer you to other resources or keep your spirits up.
# 3. Use a living business plan
Review your business plan on a quarterly or even month-to-month basis so you see developing problems earlier, identify the strengths of the business and make more pinpoint adaptations as needed.
# 4. Keep track of finances
When things are tight or in flux, it becomes more important to review where the revenue is coming from as well as the expenses. This includes tax planning, establishing (or maintaining) reserve capital and a line of credit.
# 5. Learn from more experienced business owners/ executives and develop new skills/ knowledge
While this might refer back to my recommendation regarding advisors, advice can come from veteran business people when you least expect it. Read books, listen to podcasts, watch videos or attend free or low-cost classes to fill in your skill gaps.
# 6. Identify what staffing needs you have and what you want them to do
Before you jump into the “I need to hire someone”, write down what you want this person to do, skills needed for the position and the ideal type of personality. It will help pre-qualify the type of talent that would fit in your small business. On the other hand, you might discover you already have the best candidate on staff and can delegate the work straightaway. The written exercise helps clarify what you are thinking as well as what you want.
It isn’t the end if your business isn’t ready for you to be CEO
As one of my clients is learning, you might be able to start separating yourself from being the number one subject matter expert but you may need to do it in stages. He gives some responsibilities to staff members, takes secondary roles on teams and advises project managers. He finds himself straddling the CEO role and the subject matter expert role as his business launches a product. He can see the projections that say this launch will be a winner but he still has to take things one day at at a time.
There are a myriad of reasons why your business may not be ready for you to be CEO. It may even feel frustrating or worrisome but it is not forever. It is an opportunity to get those ducks in a row. Prepare yourself and your business so, when you do become CEO, it is smooth and logical.
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