Ask Gerber : Do I Need A CEO?

At this stage in business ($5M-$20M annual sales), there is no such thing as a Chief Executive Officer (CEO). For small businesses this seat rolls up into the shareholder/founder/entrepreneur because you still need to figure out the kinks of business growth.

As a small business you (as the entrepreneur) still have some learning to do. Your path to growth can be forced to pivot at any given time, and you need to be the driver of the bus until you understand your long-term growth plan.

In a large company the CEO is there to make major corporate decisions, manage company operations and resources, and be the main contact for communications between the board of directors and company operations.

YOUR NEEDS AS A SMALL BUSINESS

In a publicly traded company communicating with and reporting to the company’s Board of Directors is a very important role. That board operates to ensure the company's success by directing company affairs while meeting the appropriate interests of its shareholders and stakeholders. In a small business, you’re not there yet. You may have an advisory board (group of trusted advisors that provide strategic advice) which is a relationship best managed by the entrepreneur.

INVESTMENT

Each seat in your C-Suite should be evaluated based on return on investment. Will the new hire allow you to focus on more important, money making activities? 

Because investing in the role of CEO comes with a hefty price tag, the answer for now is no. The entrepreneur is fully capable to operate in this role while you grow.