Small Business Secrets
Are you thinking about starting a small business, freelancing, or turning a hobby into a full-time job? Or perhaps you're already running your own business and need some inspiration to take it to the next level. Each week, join small business coach Dave Crenshaw for two short lessons that reveal the secrets of running a successful small business. This series covers topics such as getting started, writing a business plan, determining your most valuable product or service, hiring people, managing processes, documenting systems, bootstrapping, seeking funding, accounting, controlling costs and profit margins, marketing, creating culture, and more.
Considering future leadership needs
- Let's talk a little bit about the future. At some point your business is going to near the final stages of being a small business and start to evolve into a medium, or even a large-sized business. The question is: who is going to lead this business at that point? Before we talked about the org chart and the difference between the founder and the president. Odds are, you have been filling both roles. The founder is the visionary, and the president is the person who makes the business run.
But, when it comes time to transition into that medium-sized business, really it's time for you exit one or both of these positions. Why is that? Well, you have learned certain skills that have helped you succeed as a small business owner, but, a different set of skills is required for a large or medium-sized business, and there are people out there who have those skills. They have that expertise, and it's much better to hire someone else, rather than you put this burden on yourself.
I've often seen businesses succeed at that point much better when someone else takes over. The question is: where does this person come from? There are two basic options. Outside the company, or inside. Let's talk about hiring outside the business. There are two basic ways to go about doing it. You can hire someone yourself by putting out a job listing, going through the interview process, all of that, or you can hire a professional recruiter, sometimes called a headhunter. These people have connections and knowledge and experience to quickly locate a new leader for your company.
You can go either way. Personally I lean toward a professional recruiter, because they're going to save you a lot of time. It's just gonna cost you a little bit more money. Now, when you actually make an offer to someone, you're going to be balancing experience versus someone who is newer, but it's going to cost you more money and you're going to have to develop them long-term. You can go either way. Of course, experience is better, because if they've worked in another medium-sized business, that's going to shorten the learning curve considerably, and it's going to allow you to exit quickly.
Now, what about inside the company? Personally, this is my favorite way of developing leadership for your business. Why is that? Part of it is because these people already know the business. They've been in it for a long period of time. It also demonstrates that you're loyal to people, that you bring them up through the ranks so to speak, and typically these people are more passionate about the business. But, if you recruit from inside your business, understand this is going to take a lot more effort on your part.
It means that you'll want to have a leadership development program that you've put together that you're putting people through on a regular basis. Now, big businesses have those development programs in place. You're going to need to put it in place yourself, and it's going to be a long-term process where people are attending seminars, and they're going to training, and they're watching courses on lynda.com to help prepare them for leadership when the time comes. Now, when is that time? It's really up to you, but part of it is, when your business can afford it.
You need to make sure you've got the money to pay that kind of salary, and also, the business needs to be stable. It needs to be to that point where it's pretty much running without you having to be there. A great way to test that is, go on vacation. Do it a couple of times. Go on an extended vacation and see what happens. That's sort of a testing group for finding out whether your business is ready to be handed off to someone else. Ultimately, you want to make this your goal: not to be the person at the top of the organization chart.
It's much better to have someone else run it. That way, you've created an asset. You've created something that can give benefit to you in the long run, but it doesn't require so much attention on your part.
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