There is a massive difference between being a business owner and being the CEO of your company.
At some point, you have to make the transition, or your growth will stall.
The reality is, anyone can be a business owner. For years, that’s exactly what I was. I had a number of small businesses that relied heavily on my involvement. If someone called in sick, I was the replacement. Something was broken? I figured out how to fix it. If a decision needed to be made, no matter how big or small, everyone knew who to call. When we needed a plan or a new system, good news: I was on speed dial.
Can you relate?
This is how nearly all businesses start and end. The business owner is doing it all.
Because of this reliance, you eventually hit a point when the business stalls.
Why So Few Succeed
The inability to transition from business owner to CEO is why only 4% of businesses ever achieve revenue of a million dollars or more. Less than 0.5% of businesses ever get to $5 million in revenue, and only 0.1% of businesses grow to $10 million and above.
With 26 million businesses in the U.S. alone, you’re in an elite group of entrepreneurs if you hit any of the above milestones. But revenue alone doesn’t mean you’ve made the transition from business owner to CEO. You need a skill set that is not taught by many. You need systems and processes for running a business.
For example, I used to have a 60% success rate with new hires. Only 60% of them would still be working for me after six months. The employee retention rate 12 months after the hire date was even worse.
My lack of abilities at hiring meant I had to use another skill I sucked at: firing people. Tell me, have you ever had this experience?
I’ve Been There
You have an employee who isn’t cutting it. They are frustrating you on a regular basis, and you start to lash out with your comments. Soon, any minor mistake this person makes puts you in a bad mood. You hope they’ll get the message, but no matter how many times it happens, they never pick up on the issues.
Finally, you’ve had enough. You bring them into your office and proceed, laundry-list style, to tell them all the things they’ve done wrong. You feel your blood pressure rising as you list mistake after mistake.
The employee might fight back a little, but ultimately, they feel so bad about themselves that they start to cry. That’s when you let the hammer drop and tell them the news: You’re fired.
Of course, this is a small office, and you know they’re a single mom with zero savings. You walk them to their desk to pack up their items in front of everyone. You stand there wishing they would hurry up because the whole company is staring. Everyone is now upset and fearful of losing their jobs.
After the employee leaves, you call a meeting to let your staff know what happened. The guilt of the situation is kicking in, and now, in front of the whole company, you proceed to bad-mouth the employee and state all the reasons they were fired.
The sad truth about the above situation is that I’ve done this. Yup, this is based on a true story. I was once the business owner who operated just like this.
As embarrassing as it is, it happened. If I still operated like this, our company would be a fraction of the size it is today. Our employees never would have voted us one of the best places to work in Idaho for three years in a row.
To make the transition from business owner to CEO, you have to change. You have to grow. It isn’t about sales and marketing. It’s all about figuring out how to create systems and processes. It is about developing the skills necessary to hire and fire someone without a 40% failure rate or the drama I detailed above.
You’ll struggle to get to a million dollars in sales without transitioning. Unless you’re venture-backed and have money to burn, you’ll never get to $3 million, $5 million, or $10 million in revenue.
It’s amazing how much has to change as you scale. Recently, I had to hire a CFO; a few years ago, that seemed like the last position I’d need. Honestly, I should have made this hire a year ago but was blind to that fact for two reasons. One, I had a lack of experience in hiring a CFO. Two, I’m really good with numbers and had a handle on the basics. Still, they eventually got away from me.
Let me ask you this: Do you really want to grow and scale? Do you want to go from business owner to CEO? At some point, you have to make the transition to be successful. When that time comes, be honest with yourself and don’t run and hide from the challenge. Put the right systems and processes in place so your team can take you off speed dial and keep things running smoothly while you focus on growing the business.