The four roles of a business owner
Business owners wear many hats: boss, salesperson, owner, manager, cheerleader, visionary, psychologist, counsellor, quasi-parent. But within the broad functions of being both a director actively working in the business, and a shareholder seeking a return on investment, the owner’s role should be split between four primary activities: leadership, growth, protection and space.
Leadership is an ongoing journey. You may be the boss, but that doesn’t mean you’re automatically considered a ‘leader’; you have to earn it. Smart owners recognise leadership is a skill they need to invest time and resources into developing in themselves.
Good leadership unites the team under a common purpose, with every person understanding their role, and the role they play in the business’ overall success. Good leadership fosters a positive and high-performance workplace environment and
a robust culture, which are vital if you want to grow the business and retain your top performers.
In addition, if you want to build a valuable business asset that you can sell in the future, leadership is critical. A business that relies on the owner is less valuable to buyers; so, you need to provide the tools, mentoring and opportunities for your team to step up and eventually do your role.
Grow or go. Survive or thrive. Bottom line, if your business isn’t growing, it’s dying. Cash flow is the lifeblood of any business. While you need to meet ever-growing overheads, it’s just as important to bring in new and challenging work that allows your people to grow and develop, and that keeps your best performers engaged and happy.
While recognising the need for growth, owners also need to keep one eye on protecting the business. There are the obvious safeguards like insurance, and processes that comply to changing regulations. But protection also encompasses developing a clear strategic direction that highlights potential threats, responds to the changing marketplace dynamics, and facilitates customer growth.
Arguably the best form of protection is to understand your numbers. You need to continually monitor your business’ fundamentals to determine whether you’re on track, or you need to take corrective action. Your accountant or business adviser can help you to determine your fundamentals. You must understand and take ownership of them.
Lastly, owners need mental space so you can perform at your best, and provide the leadership, growth and protection your business needs from you.
“That’s great,” I hear frazzled business owners cry. “How do I get space?!”
The best way is to block out time in your diary. I block out a morning or afternoon every week, well in advance so it’s locked in. There will always be a ‘crisis’ vying for your attention, so you have to enforce that space. If you respect it, your team will too – and over time they’ll learn to fend for themselves.
Ultimately, owners that want to maximise their space – and increase the value of their business asset – need to step back and let their people step up. This is easier said than done. There will be challenges in making it work, and it’s downright scary for some owners whose identity is tied up in being the boss. But if you don’t, you’ll never get the space you need to lead, grow and protect your business.
Jason Cunningham is a business growth expert, author, keynote speaker and industry commentator, and owns his own successful financial practice.
Get jason’s book at www.jasoncunningham.com.au/book