When I talk about business owners in this section, what I am talking about is “big” business owners, as opposed to the self-employed, and entrepreneurial business owners of the previous pages.
Big business owners may well have started as small business owners, and grown their business over time, or they may have acquired the business by buying it or even inheriting it.
Business Owners - Delegation
The key difference between a big business owner and a small business owner or self-employed owner is that whilst big business owners have ultimate control of the company, and can decide the general strategic direction of the business, they generally do this by hiring appropriately qualified senior staff and delegating the operational running of the business to them.
So in practice, all the usual business owner responsibilities such as creating and updating the business plan, securing and arranging finance, finding and hiring staff, reviewing sales figures, developing marketing strategies, overseeing the day to day activities, and identifying new business opportunities, are all delegated to other people.
Business owners can take six months off
The measure of being a big business owner, is that if you took six months off and we're away from the business altogether, without having any input into it at all, would it still function effectively?
Would it produce the same volume of goods and services, at the same level of quality and consistency, and generate the same profit margins?
If the answer is yes, then you are a big business owner. Your business will function perfectly well without any input from you, and will therefore generate an ongoing passive income for you, whilst you are away doing other things.
If on the other hand, you spent much of your time on your phone or laptop answering emails, sorting out problems, and authorising things, then your business is unable to function without you, and you are still a hands-on business operator owner and not a true big business owner.
Oversight role of business owners
Some big business owners take an official oversight position, such as that of chairman of the board, whereas others don’t sit on the board or have any executive role in the business at all. They are of course entitled to any profits of the company (if they have full ownership), and will no doubt decide how, if, and when, any distributions are to be made to them.
Big business owners know that the key to success is building the right team, and having exceptional people brought in at all levels. Whilst you need to have your own leadership skills and strategic vision, you also need to carefully hire your top team, so that over time, they can step into leadership roles and handle the day to day operations of the business without you.
They must be your most trusted advisors, as you are entrusting your business and reputation to them. Remember the paragraph on “who you know” on an earlier page.
Becoming a big business owner is ultimately the ideal eventual position for many small business owners, and entrepreneurs, as you are effectively being paid for doing nothing. You get all the profits of the business, that everyone else is working to achieve, whilst you spend time sitting by the pool!
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