Mastering the Transition from Business Owner to CEO: A Comprehensive Guide for a Successful Shift in Role
As a business owner, you inherently are a CEO, but it’s how you show up in that role that makes all the difference. CEOs play a super specific role in the company that evolves as the business grows. Right now, you may still be doing a lot of things related to your skill set and the results you bring to clients. After all, getting paid to do the things you love are part of the whole reason you started your business in the first place. But in order to run a successful and sustainable business, this involves doing things and having conversations that are otherwise out of your comfort zone.
Keep reading as we help you define what it means to step into your true CEO role and essential skills needed to run your business as the founder.
Understanding Capacity
We cannot stress enough how crucial it is that you understand how capacity works. If you raise or lower your capacity, everything else in your business is adjusted as well. People like to think of everything existing independently when it comes to making business decisions, but all that leads to is running a business where you aren’t sure what needs to happen in order for you to reach our goals. Knowing and understanding your capacity means you are able to do things more intentionally.
CAPACITY ISN’T PRICE-DEPENDENT
Regardless of whether your services are low-ticket, high-ticket or if you offer packages or retainers, one thing remains true– every business owner and every type of price point can hit a capacity ceiling. Raising your prices isn't the only thing that's going to help you get out of capacity. There are many different factors involved, like where else you're spending your time as the CEO, how much your team impacts your ability to work with more clients, and your fluctuated schedule of refilling your pipeline. Capacity takes every single category of your business into consideration– from the balance of sales and marketing to having enough discovery calls, to closing enough clients, to also delivering work.
How to Divide Your Time as a CEO
As the CEO of your company, it’s crucial that you allocate your time in the best way possible (which we know is easier said than done). We want to let you in on a little secret that we share with our clients, which is how much time you should spend in the different areas of your business. By having this foundation that you can build on, you’ll become more confident in knowing that your attention is focused where it should be.
THE CLIENT DELIVERY TRAP
Although it’s true that client delivery is the area where your time will be spent the most, it’s super easy for you to spend too much time here. As the CEO, you should only be spending about 30% of your time on client delivery. Right now you’re probably spending more like 90-100% of your time on this even if you don’t realize it, which can consequently decrease the quality of your services and cause a drop in referrals.
WORKING ON YOUR BUSINESS
When we say working on your business, we mean everything from administration to business operations, to automated workflows, to scheduling meetings with clients, to all the work that takes place backstage. All of this should take up 20% of your time, making it the second largest focus of your attention. Contrary to popular belief, this part actually does affect your client delivery and sales as well. Clients seem to have a sixth sense for telling when things aren’t working behind the scenes. It’s the invisible operations that will create the efficiencies you need to deliver great client work and optimize your output.
PROSPECTING, MARKETING & SALES
We look at these as two separate categories– prospecting and marketing as one and sales as the other. How you spend your time in either totally depends on your needs, industry, and type of activities that lead to sales. On average, you should spend 15% on prospecting and marketing and 15% on sales, but it really comes down to finding balance and spending time on the marketing strategies that directly result in more sales. No matter what strategies you’re using or platforms you’re marketing on, ask yourself what specifically is getting people to notice your offer and show interest. This’ll give you a great indication of where to spend your time (for example, 20% on marketing and 10% on sales).
PERSONAL AND PROFESSIONAL DEVELOPMENT
You may think that as the CEO, you need to spend most of your time on leadership, but it actually makes up a pretty small percentage of your time– 10% to be exact. When we refer to leadership, we’re talking about the time you use to dream, ideate, and strategize, which is basically every CEOs favorite thing to do. It also includes your personal and professional development. Now, 10% may seem like a super small slice of time, but in a standard 40-hour work week that’s a full 4 hours which you can spread out over a few days or spend on a half-day. You can get so many things done in 4 hours!
INTERNAL TEAM MEETINGS
This final category is something that often gets neglected and, depending on your team, this section may currently be non-existent for you. We recommend that you spend 10% of your weekly schedule on internal meetings. That means checking in with anyone that you work with, whether they’re employees or contractors (not clients). It’s important that you have a dedicated space for this. It can be something as simple as a Slack message or as consistent as a weekly meeting, but it’s an important opportunity to develop community within your team and build camaraderie. These things don’t materialize out of thin air, so you need to be intentional about building them.
How Defining Your Business Values and Vision Statement Can Drive Success
Identifying values is such a key component to creating consistency within your business and standards for how to work in your business. You want to make sure that your team members are also following your values and showing up in their work in those ways. They aren’t just about how you and your team work in your business either. Creating your values also allows you to also establish your client experience vision and set guidelines for how you want your brand to show up for your clients. We share more about defining your values, how to live in them, and scripts for how to define them in this blog post, but we’ll give you the gist here.
IDENTIFYING YOUR VALUES
The first step to identifying your values is brainstorming a list of qualities, standards, or beliefs that could become your value. Get them all out on paper to try a few on for size before ultimately dwindling the list down to 4-6 values. We suggest one of these values be external, meaning it also applies to your clients. You only need about one or two client-facing values to encompass how your business can show up for your clients.
A key tip when identifying your values is to think of them as behaviors, not only for yourself but for your team, too. How do you want someone to act or react in a situation versus how would you not want them to act or react? Your values are often things that will back up boundaries that you may have set for yourself. This allows you to lean on your values as backup for how you do or don’t want to perform a certain action in your business.
DEFINING YOUR VALUES
By “define,” we do mean literally creating definitions for each value, but don’t use the name of the value in the definition. You could ask 5 different people what a certain word or phrase means to them, and you’d receive 5 different responses. This is where you get to share what this value means to YOU and why it’s important. We also recommend sharing clear examples of what it means to live in versus not live in each value, which provides examples team members can follow to really provide a clear understanding of what it means to practice those values.
Strategies for Hiring and Fostering an Ethical Team Culture
The conversation of hiring is one that always makes our clients nervous, and for good reason! There’s a ton of contradicting information out there on the best ways to go about hiring, not to mention developing your leadership skills and building an ethical team culture.
THE DIFFERENCE BETWEEN CONTRACTORS & EMPLOYEES
One of the first choices you’ll have when starting your team building journey is whether to hire employees or contractors, and understanding the differences between the two are so crucial (and potentially saving you a massive penalty from the IRS).
A big difference between the two comes down to task delegation and outcomes. The most important thing to note about contractors is that they fulfill their tasks based on expertise– they’ve grown their skills in a specific area, and that area is their primary focus. Employees, on the other hand, could have focus in a certain area, but they aren’t limited to it. Their roles could continue to shift and evolve as you both are uncovering their strengths, weaknesses, and passions.
There are also differences in how you treat them. Employees are prioritizing your company, they abide by your office hours and work schedule, they’re solely responsible for the tasks they complete, and they can be hired and fired at will. Independent contractors are business owners just like you. They likely have a roster of other clients they’re working with, so the attention isn’t always on your business, plus they have their own office hours and are free to perform tasks whenever they’ve scheduled the time to.
BEST PRACTICES FOR HIRING
There are many nuances to hiring, but from what we’ve learned over the years, there are three major points we want to get across:
Hire to fulfill the solutions to the problems you’re facing in your business. This means you should already have the solutions identified before hiring (which also helps tremendously when it comes to creating the job description).
Don’t hire internationally just to save money. While the choice of looking for international contractors is up to you, if you have the goal of finding “cheap labor,” you’re going about things totally unethically. Know your budget for the position and pay accordingly.
You shouldn’t hire yourself. We know you want to find “another you,” but that person won’t have the same stake in your business. You’re essentially giving them all of the responsibilities of an owner without any of the risk, ultimately leading to entitlement, resentment, and unmet expectations
DEVELOPING A CULTURE OF CURIOSITY
One of the most valuable and inclusive tools you can give your team is insight into the evolution of your thought patterns. The way that we’ve been able to accomplish this is by speaking openly with our team members about the things that we used to only speak about during our private conversations. This opened them up to our fears and excitements, encouraged open discussions, and allowed more room for them to share their ideas. Doing this also helped massively in our efforts to foster an experimental mindset with our team, which comes down to combating perfectionism, helping them become more comfortable with constructive criticism, and overall being open-minded and having the freedom to express themselves.
Financial Literacy for Service-Providers-Turned-CEOs
Financial literacy is a foundational part of what we teach, and even though it’s a scary and uncomfortable conversation to have, it’s extremely necessary. You may have been able to go without paying too close attention to your numbers, but instituting a proper financial system is essential. This all starts with getting your books in order. Your books determine how much you get paid, what you owe in taxes, whether you’re in debt or thriving, and ultimately whether you’re in business. Bookkeeping isn’t only for tax purposes; it’s about being an informed business owner. If you need help choosing a bookkeeper, this podcast episode is for you.
UNDERSTANDING P&L STATEMENTS & BALANCE SHEETS
Profit and loss statements and balance sheets are two critical and empowering documents for you to understand. Put simply, P&L statements represent all of the cash collected income coming into the business and all of the expenses that went back out. Balance sheets represent the assets and cash value of your company. If you aren’t looking at and interpreting these documents, you can start to become very reactionary. We want you to avoid the inaccurate recording of finances so that you don’t have a false sense of your business’ finances or pay incorrect taxes.
Your On-Demand Executive Team
Good on you if you made all the way to the end of this post! We know this was a lot of information to take in, and it isn’t even half of it when it comes to crucial decisions as the CEO of your business. With C-Suite on Demand, the Boss Project team can act as your on-demand executive team, providing the guidance and support you need to make informed decisions and confidently lead your business. We’ll guide you through budgeting for growth, hiring team members, onboarding effectively, and creating an intentional team culture. With our expert advice and collaborative approach, you'll never have to go it alone again. Let’s chat to see if C-Suite on Demand is the right fit for you– just fill out this short waitlist to get on our calendar!
