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Have You Ever Asked Yourself, “What is My Job as CEO?”
Have You Ever Asked Yourself, “What is My Job as CEO?”
BML #107: Do you Know Your Job?
When I refer to the CEO of a small to medium-sized business (SMB), I’m talking about someone who manages a team of a minimum of four or more people.
In today’s world, teams can be small due to technology, so the title of CEO doesn’t apply to solo entrepreneurs.
This is part 1 of 5-part newsletters titles: “What is your job as CEO?”
Here’s what I think you need to master:
Ensure the Company Doesn’t Run Out of Cash Bankruptcy is a very real threat. Remember, “One day everything seems fine—and the next you are out of cash.” Cash management is critical. If you’re company runs out of cash, you’re dead meat.
Set the Vision for the Company Define the purpose and direction of your business. What’s your “why”?
Hire Great People Your team is your most valuable asset. No question about it.
Develop Your Team Invest in player development. Your team’s growth fuels your company’s success.
Remove Obstacles for Your Team Free your team from operational headaches so they can focus on the tasks that drive revenue.
Pause and Reflect: Take 10 Minutes because this is thought process is critical to the next 1-3-5 years of your life.
Review this list. Do you agree?
Every one of these responsibilities is challenging, especially since most CEOs start with a vision to solve a market problem, not necessarily to master all five disciplines.
Over the next few newsletters, I’ll break these down further, starting with cash management.
Job #1: Ensure the Company Doesn’t Run Out of Cash
Story of Inventory Retail Business: The 8-Figure Business on the Brink
This is the story of an 8-figure business that was on the edge of disaster because they weren’t paying attention to their Return on Inventory Investment (ROII).
They didn’t have a Profit and Loss (P&L) statement for each of their products.
When you have a large catalog and you don’t track P&L at the individual SKU level, it’s easy to think you’re making money on products that are actually losing money.
This happens because you’re looking at your entire catalog in aggregate, rather than analyzing revenue and profits at the SKU level.
I got the call when Keith’s cash was draining from the business so fast that the owner was worried about a possible bankruptcy (BK).
It was pay period to pay period time. This is a worst-case scenario.
He knew they’d run out of stock on some big sellers, but what he didn’t realize was that some of the lower-selling SKUs were actually losing significant amounts of money.
We conducted a detailed P&L analysis for each SKU. We identified and stopped selling products that were contributing a negative margin.
You may wonder how this was happening.
There’s a lot to unpack here, but to keep it simple: in this case, they were spending more on marketing than these products were bringing in collectively.
Bottom line: We fixed the issue, and as the owner said, “You saved my company from a possible BK.” Whether or not bankruptcy was imminent, it certainly felt that way to him.
Take a moment and research small businesses that have gone bankrupt. Look beyond the big names. You’ll find countless small businesses, some around for generations, that went under.
Why?
You’ll hear reasons about financial challenges, competition, or economic downturns. But here’s my take: they were mismanaged.
The CEO didn’t properly manage cash, whether due to unexpected sales drops, increased competition, or other market disruptions.
The Bottom Line
It doesn’t matter why sales dropped—what matters is whether the person in charge effectively managed the storm.
For example, our sales dropped 85% in two days due to a major market disruption (a true story from March 2024, during COVID).
Did we survive? Yes. How? That’s for a future post but I will say, it was a huge team effort.
Next up: Job #2 of the CEO: Set the Vision for the Company
If you’re facing cash challenges, let’s talk.
Have You Ever Asked Yourself, “What is My Job as CEO?”
Have You Ever Asked Yourself, “What is My Job as CEO?”
BML #107: Do you Know Your Job?
When I refer to the CEO of a small to medium-sized business (SMB), I’m talking about someone who manages a team of a minimum of four or more people.
In today’s world, teams can be small due to technology, so the title of CEO doesn’t apply to solo entrepreneurs.
This is part 1 of 5-part newsletters titles: “What is your job as CEO?”
Here’s what I think you need to master:
Ensure the Company Doesn’t Run Out of Cash Bankruptcy is a very real threat. Remember, “One day everything seems fine—and the next you are out of cash.” Cash management is critical. If you’re company runs out of cash, you’re dead meat.
Set the Vision for the Company Define the purpose and direction of your business. What’s your “why”?
Hire Great People Your team is your most valuable asset. No question about it.
Develop Your Team Invest in player development. Your team’s growth fuels your company’s success.
Remove Obstacles for Your Team Free your team from operational headaches so they can focus on the tasks that drive revenue.
Pause and Reflect: Take 10 Minutes because this is thought process is critical to the next 1-3-5 years of your life.
Review this list. Do you agree?
Every one of these responsibilities is challenging, especially since most CEOs start with a vision to solve a market problem, not necessarily to master all five disciplines.
Over the next few newsletters, I’ll break these down further, starting with cash management.
Job #1: Ensure the Company Doesn’t Run Out of Cash
Story of Inventory Retail Business: The 8-Figure Business on the Brink
This is the story of an 8-figure business that was on the edge of disaster because they weren’t paying attention to their Return on Inventory Investment (ROII).
They didn’t have a Profit and Loss (P&L) statement for each of their products.
When you have a large catalog and you don’t track P&L at the individual SKU level, it’s easy to think you’re making money on products that are actually losing money.
This happens because you’re looking at your entire catalog in aggregate, rather than analyzing revenue and profits at the SKU level.
I got the call when Keith’s cash was draining from the business so fast that the owner was worried about a possible bankruptcy (BK).
It was pay period to pay period time. This is a worst-case scenario.
He knew they’d run out of stock on some big sellers, but what he didn’t realize was that some of the lower-selling SKUs were actually losing significant amounts of money.
We conducted a detailed P&L analysis for each SKU. We identified and stopped selling products that were contributing a negative margin.
You may wonder how this was happening.
There’s a lot to unpack here, but to keep it simple: in this case, they were spending more on marketing than these products were bringing in collectively.
Bottom line: We fixed the issue, and as the owner said, “You saved my company from a possible BK.” Whether or not bankruptcy was imminent, it certainly felt that way to him.
Take a moment and research small businesses that have gone bankrupt. Look beyond the big names. You’ll find countless small businesses, some around for generations, that went under.
Why?
You’ll hear reasons about financial challenges, competition, or economic downturns. But here’s my take: they were mismanaged.
The CEO didn’t properly manage cash, whether due to unexpected sales drops, increased competition, or other market disruptions.
The Bottom Line
It doesn’t matter why sales dropped—what matters is whether the person in charge effectively managed the storm.
For example, our sales dropped 85% in two days due to a major market disruption (a true story from March 2024, during COVID).
Did we survive? Yes. How? That’s for a future post but I will say, it was a huge team effort.
Next up: Job #2 of the CEO: Set the Vision for the Company
If you’re facing cash challenges, let’s talk.
© 2024 Deliberate Achievement LLC