By Tom Crouser
So what’s my job as business owner? Makes my head hurt. Wrapped up in one short question is one seriously long answer. So, this is part one of four and my first answer is that there’s not a job for an owner. There is for the person running the business, however.
Ownership is a passive verb. If you own stock in General Motors, you have a right to a return on investment and you have a right to expect your management will focus on increasing your shareholder value. In our kinds of businesses it is no different. You may own a car but that does you little good until you take on another role – the role of driver. Same is true with our businesses and the refusal of many business owners to actually drive their car is a root cause of many problems.
Let’s begin by looking at ownership. Do you really own your business? Some boys like to departmentalize their life. They say, “This is my business and I’ll do darned well what I please with it.” Hmm... Get a divorce and see how much of it you own.
Some girls in a supportive spouse role also want to departmentalize – I don’t care what he does with his business, I’ve got a career of my own. Hmm... Let him buy a five-color press he can’t pay for and let’s see how independent from the business you remain. Even children are involved. Growing up on the family farm is different than growing up in town and we are today’s equivalent of the family farm. When the fences are down and the cows are out, everyone is affected.
Point is that you must start with the premise that we don’t have stockholders in our kinds of businesses – we have stakeholders. And regardless of whose name is on the stock certificates – all will share rights and responsibilities. Therefore the concept that there is one job description for a business owner doesn’t hit the mark because it assumes there is one business owner and there is not – the family owns the business and each member has a slightly different but similar role as stakeholder. Essentially though the job description is similar to any other stockholder – the owners have a right to a return on investment.
Because we are not General Motors, however, we define this more precisely. Stakeholders have a right to a return on investment in both time and money. The litmus test is the family should have more time together as a family and more money because we are in business, not less. And if this is not happening, then it must be fixed or we should just shut it down and get a real job.
Now to the organizational question – stakeholders select one person to actually drive the car – or run the business. It’s not two, it’s not a committee, and it’s not by consensus. One person has to steer, dodge the potholes and decide when to speed up and when to brake. That’s not to say there will not be disagreements or challenges, especially between spouses working together. It simply means that these disagreements should be stakeholder disagreements and not operational ones.
We can obviously disagree on our destination. We can obviously disagree on whether to drive all night or hit a rest stop. We can even disagree on whether we need a new car or not. In an organized approach, we just keep these disagreements off the shop floor. And, remember, that doesn’t mean the driver has absolute power. Others may see dangers and bring them to the driver’s attention. This process of stakeholder agreements and conflict resolutions is another chapter, so allow me to get on with the question at hand.
What’s the job of the person running the business or driving the car? That’s simple. The job of the general manager (president, CEO or whatever you want to call them) is to “Make and Meet All Budgets.”
In budgeting we decide what our sales and expenses are going to be in the future. We decide how much we will take out of the business and we will decide what we do with the remainder.