A phenomenon that I have been watching for as long as I can remember is entrepreneurs who think they can magically transform themselves into CEOs purely because they started a business.
Well, brace yourself. Because the hard cold truth is that most entrepreneurs simply do not encompass the skill set to be the CEO of their own organization.
Unfortunately, it is this one mistake that destroys more businesses than any other.
And, in most cases, big time corporate CEO’s are not entrepreneurs.
So, what is the real difference between an entrepreneur and a CEO?
Now, before we break it down let me say this: There are some people who can perform both roles at the same time. These are generally people who grew up in the corporate world and have real experience in the business world prior to starting their own business.
If you have been following me for any length of time you know that before I started my own company I was a corporate CEO for years. I ran companies that had upward of 200 employees. I grew company revenues uphill to nearly 100 million dollars. And, I was able to organize and re-engineer these companies when the market place so warranted.
Perhaps, most importantly, I was able to make the tough decisions. I was able to hire and fire according to the company’s goals, values and well being, always putting aside my personal feelings. I was able to launch or “kill” products for the good of company. And, I was able to learn the “art of business” from the very best.
Currently, I play both roles for my company. However, my partner is the president of my company. He shares in all the business decisions that are made. This affords me the time to provide all of our members with high quality products and services.
What is an Entrepreneur?
An entrepreneur is a person who starts a business undertaking, assuming the financial risk for the sake of profit. This is the person who has the vision and sees an opportunity in the market place. They make a plan and roll out the business. In the beginning, they generally manage the business and receive all the profits.
More precisely, entrepreneurs build products and organizations and advertise (sell) those products to people who will pay for them.
In order to do this, entrepreneurs must be right about seven crucial choices:
* Choosing the marketplace
* Identifying the ideal customer
* Setting goals
* Building teams
* Understanding the competition
* Raising capital
* Embracing change
If you just said “that’s me” to all of the above —fantastic! Now, keep reading because you need this publication more than ever!
What is a CEO?
The letters CEO stand for Chief Executive Officer. This is the highest-ranking executive manager in a corporation or organization. The CEO has responsibility for the overall success and livelihood of the entire organization. The CEO has the ultimate authority to make final decisions for a company.
The CEO sets the corporate culture. Working with the founder, they determine the companies’ overall mission and core values. They make sure all business is done in conjunction to that mission and according to their core values.
The CEO has the overall responsibility for creating, planning, implementing, and integrating the strategic direction of an organization in order to meet their financial goals. This includes responsibility for all components and departments of the business.
The CEO makes certain that the organization’s leadership maintains constant awareness of both the external and internal competitive landscape, opportunities for expansion, customers, markets, new industry developments and standards.
The CEO is able to make the tough decisions based on the company’s needs, values and goals!
Depending on the size of the organization, the CEO generally reports to a Board of Directors. If the CEO is also the company founder and/or chief stockholder and owner, the Board of Directors is largely an advisory role.
The Big Dilemma
I know what you are thinking. You’re thinking you just started your business and can’t afford a CEO.
Well, that may or may not be true.
If your business is doing a million dollars or more, you can’t afford not to hire a CEO.
I know the thought of that may seem scary. So, here is what you do: call that person a GM. A General Manager. Keep them in that GM title until you hit the five million dollar mark and then promote them to CEO.
I’ll never forget some of the best advice I received from Mark Ford (aka Michael Masterson) seven years ago. He said everyone needs mentors and partners regardless of the size of their business. And, I have followed that advice every day since then.
When you look for that partner, make sure they have skills you don’t. Too often we tend to partner up with people who have the exact same skill set, leaving a huge void in our business.
Here is a sample job description to help you find a CEO or GM:
The responsibilities of a CEO include:
• Set up, dissect and understand all profit and loss statements
• Creating, communicating, and implementing the organization’s vision, mission, and overall direction. Leading the development and implementation of the overall organization’s strategy
• Leading, guiding, directing, and evaluating the work of other executive leaders including presidents, vice presidents, directors, managers, and coordinators and depending on the organization’s reporting structure
• Soliciting advice and guidance, when appropriate, from a Board of Directors and/or founder
• Formulating and implementing the strategic plan that guides the direction of the business or organization
• Overseeing the complete operation of an organization in accordance with the direction established in the strategic plans
• Evaluating the success of the organization
• Maintaining awareness of both the external and internal competitive landscape, opportunities for expansion, customers, markets, new industry developments and standards, and so forth
• Representing the organization for civic and professional association responsibilities and activities in the local community and industry
• Demonstrating the leadership necessary to make the organization’s mission a success. This leadership includes providing leadership vision, leadership that attracts followers, and all other aspects of successful leadership
Use this as a guideline and personalize it for your organization. Once you find your partner, you will see your business flourish.