Most small businesses start out, well, small. Usually, there is just the owner and maybe a few associates. This is typically referred to a ‘Mom & Pop” business. However, as the business starts to grow, the facility gets larger, and more employees are hired. It is quite possible for the company – due to its increased size – to outgrow the owner’s business acumen.
Often the owner is quite skilled in a trade or specialty; which is why the business was started in the first place. The owner knows a lot about the company but may not know how to run all facets of the business. Initially, the owner could run the business. But when businesses hit the one to two-million-dollar revenue mark, things begin to change. The owner may not be able to track everything; there are more employees, more regulation, more headaches, and just more of everything.
While some small business owners recognize the short comings, many do not. If the owner does not, the business problems are usually blamed on external forces. In this case, the business may limp along for years and in the worst case, the business goes out of business.
How can a small business owner address these shortcomings in business acumen? You can hire a General or Operations manager. Just because you own the business does not mean you need to sit in the corner office. Do what you love to do in the business and hire capable people to fill in the voids. Remember you were not necessarily trained in business management.
Items to consider when making that decision:
- First, congratulations for realizing that you cannot wear every hat in the organization – and be great at wearing all of them.
- Making a change in the management of your company should not be on a ‘whim.’ It must be a well thought out process and fit into you long term plan for the company.
- The person you hire does not need to be from your industry. However, the person must have formal business education and background.
- First look at your current team for a possible candidate. You may be surprised at what talent you may already have. However, finding the right person for the position is more important than promoting someone from within.
- Search widely. You need the best person to lead your company. Take no short cuts here, the position is too important.
- Create a well-defined list of expectations for the new manager prior to the start date.
- To attract a good candidate, the person must see a valuable long term future and cultural fit with your business. Depending on this situation, they may need to see a future for the company beyond your retirement.
- Be realistic on what the person can expect in their position and the authority given. You are hiring this person to manage your business, so let them manage. The new manager most likely will differ in management procedure. Stay out of the way and let them do the job you hired them to do. Now, if they are not achieving the desired results, that is another story.
It is a very big and tough decision to hand the management of your company over to another person. If you decide on this course of action, be sure you have a thorough approach.
At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information: