There comes a time in every growing business where an entrepreneur has to make some key hires to ensure the health and longevity of their operations.
Our survey of 2000 small business owners showed successful small business owners don’t pretend to have all the answers. Instead, they establish a strong network of family, advisors, and mentors, including an accountant or financial advisor.
A third of successful entrepreneurs say they have turned to mentors, compared to just 14% of respondents who ran businesses that had to close.
It’s a stat that reiterates how important hiring the right team is to the success of your business.
In the throes of growing a company, there a three hires that, if you secure the right candidate, will make every business leader’s life easier.
The Chief Financial Officer
The finance person should actually play the role of the Chief Performance Officer. They are the ones who are able to join the dots between customers, revenue, key indicators and the financial performance of the business. A CFO connects numbers with business strategy.
At a dinner in San Francisco recently, a long-time exec was discussing just how big a difference having the right leadership team in place can make to a company, no matter its size. He was discussing how a profitable, private, family owned company that manufacturers faucets was making a margin of about 6%.
After much debate, the family decided to maintain their share holding but hired a professional CFO. Two years later, their margins are now over 30%. They still sell the same products, offer the same service, the only change that was made was the leadership team — and the price they sold their products at.
It’s an interesting way to look at growth. When we talk about expansion, it’s usually into new markets or adding new products or services. Rarely do we actually discuss the impact subtle changes can make to a business.
Having a pro concentrate on the numbers enables the founder to get on with building the company, focusing on their own strengths.
The Chief Marketing Officer
The marketing person will set your company’s tone, find its customer base and build it out. Our CMO, Andy Lark, said recently that despite all the advances in marketing automation and data analytics, the job of a marketer is still to be human and engage with the customer.
While data and automation is all the rage, he’s careful to emphasize how important it is to actually talk to customers so that marketers can create beautiful product experiences.
“Data will tell you who you should fall in love with and what your chances are of them falling in love with you,” he said.
“We need to stop looking at marketing automation as the solution and actually ask the customer what they want. The trick is to understand that our role, as marketers, is to understand that we create a product experience.
“The more you enhance the experience, the more chance you have of getting your customers to fall in love with you.”
This is complex but incredibly important for every growing business. Companies live and die by their reputation and it’s your marketing hire’s responsibility to mold that so your target market chooses your product or service over your competitors’.
The Chief Revenue Officer
Adding a person to the ranks whose job it is to concentrate on sales, sell, grow, acquire customers and keep your pipeline full of prospective customers is a vital role that will keep the wolf from the door and enable the company to hit and exceed its targets.
A good CRO will also examine the strategy behind selling. They will look at where you currently sell, where you should be selling, as well as how you close a deal, gain efficiency, scale, and velocity.
VMware’s former President and COO, Carl Eschenbach, is a prime example of what a company can achieve when its management team works in deliberate lockstep. Joining the company in 2002, he’s helped grow the business from over $31 million to $6 billion in revenues and from 200 staff to more than 18,000. In 2012, Eschenbach moved into the COO role and was responsible for many different functions including all go-to-market strategies and execution.
The biggest mistake small business owners make in the early days is that they don’t think about how they’re going to make sales and close deals.
Healthy cash flow, which is generated by sales, is critical for business survival. Running low on cash is one of the main reasons around 12% of the 28 million small businesses in the U.S. shut down each year.
Most small business owners are focused on their product, a florist is thinking about the flowers they need to order and the bouquets they’re going to create. And while that’s important, it’s not the whole picture.
Small businesses should live and die by their sales numbers. Selling is the most fundamental part of the business. Most people in a business can spend money, but the art of running a business is making money. Having a talented and dedicated person thinking about sales will help you establish a stronger business.
In today’s technical leader-founded companies, the role of the CMO, CRO and CFO are hugely important to establish traction. Hiring talented professionals to handle the areas where you aren’t as strong, enables you to run a better business and empowers you to take a step back when you need the time out.