The Roles of a Business Owner
When you start a small business, you’re often forced to manage most of the functions of your company. As your business grows, you’ll benefit by hiring experts to run different areas of your company. Owners who refuse to delegate functions so that they can focus on the core business can dilute their overall effectiveness.
A small business owner usually has the most product or service expertise of anyone at his company. If this is the case with your business, stay focused on maintaining and improving what you sell. This includes evaluating the competition, understanding your customers inside and out and maintaining or improving quality while controlling costs and adding new features or products to your line.
If you are not skilled at sales, it’s still important to work closely with your sales director. Someone motivated primarily by commissions might take shortcuts to selling and damage your brand. Keep control over how and where your sales team sells your product or service. Offering discounts to increase sales can make you look cheap, inferior or desperate. Selling on your website, through a big box or using fundraisers, rather that putting your product in boutiques or high-end retailers, might send the wrong message to your target customers.
Limit your involvement in the area of finance to preparing annual forecasts and budgets, reviewing monthly financial performance and conducting year-end audits. Let your accounting staff handle your day-to-day accounting, payroll, payables and receivables and check-writing. Always run your budgets and projections, especially those involving sales and income, by an objective third party who has access to at least one year’s financial records. Work with a qualified tax attorney to ensure you only take allowable deductions and pay all of your taxes when they are due.
If you’re not trained in marketing, including research, advertising, public relations and promotions, resist the temptation to get too involved. Many small business owners believe that marketing is primarily a creative endeavor and that a company’s advertising and promotions reflect personally on the owner. Don’t overrule a trained marketing professional on his recommendations if you simply have a gut feeling or opinion.
You will want to have the final say on hiring key employees, but once your staff is on board, don’t skip the chain of command and start managing employees who have supervisors. You will diminish the authority of your management team, increase turnover and frustrate employees. An owner’s role in HR should include creating an organization chart, discussing job descriptions and interviewing top-level candidates.