Everyone knows a business owner wears many hats – from Chief Executive to Janitor. While taking a Small Business Management class with Dr. Thomas Jones, I learned to be aware of these three critical ‘hats’, the responsibilities and purpose of each, and how much time you need to allow for each of them to do their job.
As the Owner of the business, you are responsible for six critical areas that answer the question of WHY you are in business and sets direction.
- You choose the strategic direction for your company.
- By asking “Would my customer care if I were no longer here?” you continue to sharpen your company’s competitive edge.
- You manage the balance sheet which means managing debt, liquidity and assets.
- You make the choices in how the company will grow – how much, in which directions and how you will do it.
- You also determine the long-term survival of the business – your exit strategy and deciding why your business should survive beyond your participation.
- You determine your firm’s citizenship – how and when it interacts with your community and with whom.
The owner needs one day per month or quarter to continuously revisit these key responsibilities to ensure the company stays on firm footing and heading in the right direction. This is largely a thinking role and we can help facilitate your thinking process. For most solo-preneurs, micro-business owners, small business owners, independent contractors and the like, this is the most overlooked position.
As the President of the business, you have four responsibilities that answer the question of WHAT will be done and in what order.
Using the strategic direction laid out by the owner, you determine the steps, goals and benchmarks that will be used to ensure the strategic goals and directions are met.
You manage the profit and loss statement and budget issues.
You analyze sales and other key areas that represent results tracking for actions and decisions you’ve made so you can make course corrections when needed.
The President also deals with the infrastructure issues of determining what resources are needed – equipment, personnel, training, raw materials, and the like.
The President needs one day a week or month to handle the crucial planning & action decisions component that keeps the business moving in a positive direction. We can help you develop reasonable action plans, set up a chart of accounts that makes it easy for you to look at a financial statement and the systems you need to track how you are doing,
As the Manager of the business, you have all the remaining responsibilities that answer the question of HOW things will be done on a day-to-day basis.
You manage daily cash flow
Prioritize the work
Manage the workforce – maybe just yourself – ensure the delivery of products and services,
Oversee the daily completion of all tasks associated with the business functions like marketing and finance.
It can be possible to have the Manager and President share one day per week as long as the work of both can be completed.
The easy hat – the one we wear most often is worn by the Workforce – the people who do the day to day work as directed by the manager. If you are a solo-preneur you wear all of these hats and since this is the hat were your expertise can shine, it often over-shadows that other three and harms the long-term success of the business. Some task hats are ill-fitting, some uncomfortable and some are just right.
Schedule time for each of these roles you fill and the responsibilities of each. By giving them all their due, even if you wear all the hats, your company will be stronger for the effort.