Small Business owners – Managers or not?

When I’m asked to provide consulting services not inside our familiar corporate environment, but to small businesses and start-ups, I frequently find myself in a somewhat awkward position. You see, many business owners do not see themselves as managers.

As many people who start their businesses today have actually left the corporate environment to seek independence, it seems that severing all ties with their previous life is more important to them than the success of their business. Because I sincerely believe that a person who manages his or her own business can benefit from the same methods and concepts that are utilized in a corporate environment, regardless of their size. And the other way around would also be true. For sure, there would be some small differences due to specific context, but in my opinion – every manager is a Manager!

So, in order to share this opinion with others, and potentially – to feel less awkward in the future, I decided to delineate the main similarities between Corporate Managers and Small Business Owners, while showing that even when there are differences in their characteristics – they are not that relevant to the Craft, the Science and the Art of Management 🙂

Parameter	Corporate Managers (CM)	Business Owners (BO)	Explanation
Level of Commitment	Medium-Low	Very High	CM can always look for a new position, while BO’s fate is connected to that of his business
Motivation	Career-based	Financial, Emotional	CM’s are mostly motivated by career-advancement opportunities, while BO’s are emotionally tied to their businesses, especially due to the fact that their financial welfare directly depends on their success
Hierarchical Relations	Variable, Position-dependent	Always on the top	CM’s relations with people around are directly dependent on his position inside the organization’s hierarchy, which changes as he’s promoted or transferred. BO’s position is constant – he’s always at the top of the pyramid, as small as it may be.
Responsibility/ Accountability	Shared, Escapable	Absolute, Constant	The responsibility inside an organization is divided between different departments and among the levels of each department. This means that when something goes wrong, the specific CM doesn’t have to accept the whole brunt of accountability. For BO, however, there is no escape from accountability – everything that happens inside his company is his personal load
Scope of responsibilities	Medium, Clearly defined	Very high, No clear boundaries	CM always has a clearly defined job description and even when he takes additional roles, and the workload becomes less bearable, there are still boundaries to be drawn. This is not the case for BO, who has to remain attuned to every aspect of company’s functioning.
Staff	Employees	Sometimes friends and family members	Many small businesses are staffed with the closest social environment of the owner, which may have implications both to the positive and to the negative side

The differences seem pretty serious, but may be they are not as absolute as it may seem?

Let’s take a look at some similarities that may potentially prove my point about Business Owners still being Managers:

Parameter	Corporate Managers	Business Owners	Explanation
Leadership	Important	Important	Both roles require a person who can provide motivation and guidance to his team, even (and may be especially) in the case of family business
Delegation	Important	Important	Both players have to consider proper division of responsibilities between team members in order to avoid doing everything themselves
Communication	Important	Important	Regardless of the number of people in the team, the head of the team has always to establish a flow of information top-down, bottom-up and horizontally
Decision-making	Important	Important	The scope of decisions may vary greatly between BO’s and CM’s, but they both have to make them
Recruiting	Important	Important	In both environments there could be a person other than the manager to deal with recruitment and training, but the final decision whom to work with still rests within the manager’s authority

I think, you can already see what I’m trying to say here. Even though the environments of Corporate Managers and Small Business Owners differ a lot from each other, THEY BOTH DO THE SAME THINGS. They both have to perform the tasks that could be best summed up as Management. And if you’re engaged in Management, there is a high chance that you are a Manager, and learning to perform better is a task that is always on your to-do list.