When most people hear about the 32.5 million US small businesses, they imagine a Mom & Pop-sized store with a handful of employees. That picture is even accurate for some businesses.
The term small business also includes businesses with hundreds of employees and millions of dollars in revenue. These small businesses often share more problems in common with large companies than other small businesses. Unfortunately, this kind of small business usually lacks the kind of CEO that helps manage those problems.
Some small businesses have turned to outsourced CEOs. Wondering how an outsourced CEO can help your business succeed? Keep reading for a quick overview of the advantages.
What Is an Outsourced CEO?
In a nutshell, an outsourced CEO is an executive that works for a third-party company that specializes in C-suite activities. Your business effectively rents that CEO from a third-party company.
They handle the standard CEO responsibilities, such as managing operations, making strategic decisions, and even interacting with the public. Depending on the organization, the CEO may also set general policies for creating or reinforcing the business culture.
With those essentials out of the way, let’s move on to the advantages.
Recruiting an in-house CEO is often a lengthy, expensive process that often calls for the services of executive recruitment services. Once you find a good fit, you must negotiate a salary and benefits package that can also prove very costly.
When you outsource the CEO role, the outsourcing company sets the rate. While not necessarily cheap, it’s generally far less expensive a hiring process and compensation package.
One of the major benefits of an outsourced CEO is that it secures you stable access to their expertise. While most business founders learn a lot through hard experience, they often lack formal business training.
An outsourced CEO will come to the table with years of on-the-job experience. All of that experience helps them spot problems or opportunities that a founder might miss.
For example, they might provide a tax strategy or help you navigate an IPO.
Frees Up Time
Many business founders operate as serial entrepreneurs. Launching a new business is time-intensive, but those demands often fall off once the new business is up and running.
Outsourcing the CEO job for six months or a year can free up the business founder to launch those other projects and then come back.
An Outsourced CEO and Your Business
An outsourced CEO can help your business succeed in several ways. An outsourced CEO can bring in expertise that a founder lacks, such as IPO experience. Outsourcing also helps you acquire that expertise without incurring the costs of recruiting and hiring an in-house CEO.
Beyond that, an outsourced CEO can free up a founder’s time. That time can allow a founder to devote the time necessary to launch a new venture that can improve overall company performance.