Roles and responsibilities of a business owner

The roles of a Business Owner can seem never-ending as you wear so many hats – mainly because all the responsibilities of the business ultimately rest with you.

These roles and responsibilities also change and develop as your business grows and develops. Whilst every business is different, there are some fairly common and predictable phases that business owners go through – and if you know what they are, then you can anticipate them – which means you can plan and prepare for them, keeping you in control of events.

I think there are four main roles of a business owner – let’s look at them in turn.

Business Owner Role No 1:Owning your business

“Profits are better than wages.” Jim Rohn

When we first think of starting a business, we each have our own reasons and motives. Whilst this will be personal to you, there are some common themes,

you want to create something that’s yours – to say “I did this!”
it’s a practical response to your current situation – such as needing something flexible to fit around family life that’s not possible as an employee – or you like the possibility to choose your own working hours, or to work from home, or to be location independent, able to work from anywhere.
you want control over our own destiny – the choice and freedom that comes with your own business. This might be because you’re naturally independently-minded. Or working for someone else led to so many compromises that starting your own business meant that you could carry on what you enjoy but without the overbearing boss and office politics!
maybe it’s financially driven – you want to create long term wealth and see starting your own business as the most effective route to it. Or you just want to generate a reasonable income doing what you know and enjoy with the potential for growth in the future.

Whatever your motives, one thing is for certain, it starts with YOU!

You have complete freedom on how to build your business.

Including what to do, how to do it, where to operate, what customers to attract, whether you’re selling service or products – there are so many choices. You can build it how you want.

So you have an idea, create a brand name and voila – you’ve started a business!

In reality all you’ve created at this point is an empty container. An empty space in which to create your business. But the point is, it’s your container! You’re an Owner at last.

It’s this ownership that gives you autonomy.

The Owner is the first of the four roles of a business owner.

Business Owner Role No 2:Doing the work

“Far and away the best prize that life has to offer is the chance to work hard at work worth doing.” Theodore Roosevelt

Now you are an Owner, you now have your first choice to make – what to DO!

You start work, probably by yourself, getting things done as best you can.

The Do-er is the second role of the business owner.

This means actually doing the work for paying customers.

So if you’re an accountant, you start providing accounting services for people, if you’re a carpenter you start building tables and shelves for people, if you’re an electrician, you start installing cabling and sockets in buildings, if you’re a programmer you start writing code, if you’re a web designer you start building beautiful websites, and if you’re a beauty therapist you start providing various treatments for people.

You are the expert, the specialist in your field and you can now spend time doing what you’re good at without getting side-tracked by office politics, horrible bosses and all the rest of it.

However as the Do-er in chief, you rapidly discover that there are other things that you need to be doing as well, some marketing, bookkeeping, tax returns and accounts, making sales, customer service, finding suppliers, managing premises, keeping up to date with new regulations, choosing IT systems, chasing payments.

The list goes on.

O for Owner can quickly become O for Overwhelm.

And being independent can quickly become feeling alone.

You reach a crisis point and realise that you can no longer do it all by yourself.

Business Owner Role No 3:Managing others

“The secret to winning is constant, consistent management.” Tom Landry

So the doing needs to give way to something else. You need to get some help and so instead of doing everything yourself, you start managing other people who do some of the doing.

The Manager is the third role of the business owner.

Now this doesn’t mean just managing employees, it can include managing outsourced contractors – you’re not just buying a service, you’re managing a relationship – it can also mean managing systems that do some of the work for you – managing technology.

Either way you look at it, you are taking one step back from doing everything yourself and starting to manage people and systems.

So now you spend your time split between the two roles of Doing and Managing. Doing what you’re good at and specialise in, and managing others who are specialists in what they do.

So that works well and the business grows. It may be that over time you need to do more managing and as a result you do less doing, in fact you may become a pure manager.

You have gone from being a specialist, an expert in your field to being a generalist – a general manager with an overview of the many parts of your business.

Of course, you will still have specialist skills and knowledge in some areas. You will be still be required to turn your hand, when needed, to the more complicated issues that require the wealth of experience and expertise that only you have.

But fundamentally your main role is as a generalist, a general manager.

Business Owner Role No 4:Leading the business

“Management is about arranging and telling. Leadership is about nurturing and enhancing.” Tom Peters

So the business grows and you get to another crisis point. The business has got more complicated again. You can no longer manage all the areas yourself, they are too time-consuming or too specialist. So you recruit some managers or heads of department and they manage the Do-ers and you manage the Managers.

The Leader is the fourth role of the business owner.

You’re managing managers and leading teams. You’re in charge of creating an environment and culture in which others can Do and Manage effectively. Maybe you’re even an inspiring leader!

So at the level of Doing and Managing, it’s all about running the business – making sure the day-to-day-stuff happens.

At this level you are leading the business. You’re more focused on longer term strategic issues and thinking about the growth and development of the business.

In many ways you’re now back to where you started with autonomy. You’re focused on strategic decision-making and helping formulate a clear direction for everyone to follow.

The level of Doing and Managing is about working IN the business whilst at this Leadership level it’s more about working ON the business.

From this leadership vantage point you can see the big picture. It’s sometimes described as the helicopter view. You can look down and see it as a whole. You’re one step removed from the daily urgency. In fact, you should be able to go on holiday and leave the business to operate without you. (How’s that working out for you??)

So, we end up with this triangle of Doing, Managing and Leading. Now the triangle is a highly stable shape and these three roles can create a highly stable business.

You as a business owner are going from doing to managing to leading – a series of mini-crises which prompt transitions – which is why you need to grow and develop as your business grows and develops.

Business Owner Role No 5:Is there a fifth role?

“The self-owned and -operated business is the freest life in the world.” Paul Hawken

So where do you go next after leading?

Well the final step takes you back to where you started!

You go back to Owning as a major concern.

If you’ve transitioned through the different phases from Doing to Managing to Leading, you are now succession planning. You are looking for someone to take over as Leader and maybe as Owner.

In this phase, Owning is about considering the value of the business. Hopefully you’ve now got an asset to sell as your final step. You’ve worked hard building and growing your business, hopefully now you’ve added a few zeros to the value!

As the Owner you’re now thinking like an investor and you look at the business differently – as an investment. It’s is a store of wealth which you can sell. Alternatively you can stay as the owner and the business becomes an asset which gives you an income.

So there we have it – the four roles of the business owner. They represent the transitions that you need to go through as the business grows.

Now in truth these four roles of the business owner are not sequential in the way I’ve described them, you’re probably always doing a combination of doing, managing and leading, but the emphasis and priorities change as the business develops.

Four Roles of a Business Owner Infographic Summary

Conclusion

So there we are – four roles of the business owner (or maybe five!)

Each role will have a different prominence for you right now. Some are more relevant at different times.

Developing your role

“Once you start a business, you have to grow it and grow with it. Starting a business is not just for Christmas.” Natalie Massenet

So which is your dominant role right now?

What is the next stage of development for you?

Are you ready for that next stage?

Have you got all that you need to make that next step a success?

Have you got the skills and competencies you need?

How well are you moving from being the technical specialist to being the generalist manager?

Have you got the right people doing the doing for you and are you managing them successfully?

Or are you still overwhelmed by your to do list?

And going back to the freedom that comes with the autonomy of Ownership – how well are you managing that?

Whichever role is the dominant one right now, being a business owner can be a lonely place. A business coach can act as a supportive professional, guiding you along the way. They can support you to grow and develop so that you can, in turn, grow and develop your business.

As a business coach, I’m a generalist in many ways, just as you are as a business owner. I’ve played all these roles myself. I’ve made the transition from technical specialist (the Do-er) to managing others (the Manager), to leading teams and organisations (the Leader) and of course as a business owner myself (the Owner).

If you would like to talk about the role you are playing in your business and the next stage of development for you, then get in touch and let’s arrange a short initial conversation to see whether I can help.

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