Every Small Business Owner Should Think like a CEO
Entrepreneurs and small business owners have a lot on their plate. They also wear a lot of hats. We might be sick and tired of these metaphors of plates and hats, but the reality is that the issues presenting themselves (the plates) require engagement from different roles we are operating in (the hats). What happens all-too-often is that entrepreneurs and small business owners never begin to think strategically beyond the current plates and hats they are dealing with. They often consume themselves with the immediate needs and fall prey to decisions that make it easier for them to move on to the next “plate” and put on the next “hat”.Thinking more strategically enables successful CEOs to make the most important changes in their companies. The results that can be seen from this key element in their leadership have convinced us that every entrepreneur and small business owner should learn to think like a CEO.
Strategic thinking is the key to shifting your focus to something bigger and more impactful than any one task that might be in front of you today.
SCORE reports that only half of all small businesses survive more than five years. CNN reports that only 30% of small businesses survive beyond ten years. So regardless of whether you are a one-person shop, a small business or even growing rapidly into a medium-sized business, the question is more about your ability, as a leader, to think like a CEO.
What is it that CEOs are doing differently than entrepreneurs and small business owners? The essential skill that separates the two is the development of the capacity to think logically through growth issues. Critical thinking about daily decisions leads to a CEOs ability to make plans with greater and greater confidence.
Consider what questions have run through your mind this year. Do any of these sound familiar?
- Should I acquire a troubled competitor or simply let them go out of business?
- When do I need another manager?
- How much time should I invest in a revised operational guide or the development of standard operating procedures?
- Should I invest in better equipment now or make due with what we have?
- Should I make improvements to our facility or think about getting a custom space or signature building?
Dealing with these questions is not unique. What questions you ask yourself NEXT will help you move in the right direction. This critical thinking skill comes into play as you deal with questions that require a strategic plan to resolve.
Consider the following as immediate follow-ups to each issue:
- How much more business would it take to totally break even on this new expense?
(This applies to physical purchases, new hires or significant investment on developing procedures.)
- Who on the team will be responsible for driving that needed extra profit to cover this expense?
- What do I have in place for contingency should the sales requirements not happen at the correct rate?
These questions represent the line of thinking used by successful CEOs when they are making a strategic decision. While there may be many more factors or valid questions to ask yourself, use these three questions as anchors. Eventually, this line of thinking will come more and more naturally. When this type of discussion can be had, strategic plans begin to develop. Those strategic plans gradually reduce the fear and uncertainty that you feel as a leader. Outcomes are still not guaranteed, but if you maintain a clear focus during change it will always have a profoundly positive effect on the future of your company.