Why small business owners are the new CEOs

A new type of CEO is emerging. They don’t answer to a board of directors and they’re not publicly listed on the New York Stock Exchange.

These CEO's still manage the business’ strategy, make long-term investments and must answer to the community. They are small business owners. And not just any small business owners, but ones who are either operating a firm entirely on their own or with just a handful of employees.

According to an analysis of LinkedIn data, more than 135,000 small business owners and sole proprietors on LinkedIn are claiming the title chief executive officer. What’s behind the trend? Is it an ego boost, a way to be more competitive or something else entirely?

I asked members and they had a lot to share on the topic. While many pointed out that some legal documents require owners designate themselves CEO, some overarching themes emerged for the impetus of putting the title on the business card:

Establishing credibility:

• Rizwan Habib: “Labeling myself a founder/CEO lets my potential and current clients know I am in charge. They do take it more seriously when they know I am the owner of the company versus an employee. Clients automatically feel a sense of relief knowing that they are dealing with the ultimate decision maker.”
• Rich Gee: “The title CEO catches potential prospects eyes, looks good on a business card and has the cache to impress the right people so they introduce you to the right people.”
• Kathi Sharpe-Ross: “As a 30-plus-year female founder, entrepreneur and business owner, the CEO title is the way to establish external authority, recognition and establish peer-to-peer high-level relationships.”
• Leonardo McClarty: “Many non-profit organizations have made this change, as well. There is a certain level of respect given to someone with the title CEO verses that of owner or executive director.”

Reflects responsibilities and risk:

• Beth Friedman: “At the end of the day, the success of our small business sits on my shoulders. I'm responsible for other people's livelihoods and salaries. Our employees have kids, spouses and mortgages. I think about these every day.”
• Melissa Retano: “It takes courage to leave a day job and start your own business, and therefore, one's title should reflect the gravity of that decision.”
• Stephanie Martinez: “I think it tells clients that you are the one in charge, the one who can negotiate pricing and you are the one taking on any accountability if anything goes wrong. Decision makers want to meet with other decisions makers, that way there isn't any time delay in getting things done.”
• Robert Stern: “It is a mentality of a person who runs the business. It is about where the buck stops and who makes the final decision. That could be a Fortune 500 company or a mom-and-pop store on Main Street. Whether you have the title or not, you are the person in charge.”

Signifies where you want to go, not where you are:

• Tim Dalhouse: “The old adage of ‘fake it till you make it’ has some value. If you look like a small mom-and-pop shop then people treat you that way; but if you look like a large, established, respected business then people see you that way.”
• Victor Perez: “CEO is not where you are, it’s where you plan to be!”
• Jodie Spears: “For me, the bottom line is a desire to show that a 49-year-old woman who has been battling metastatic breast cancer for 10 years can be the chief executive officer of her own successful company. I hope it encourages others to live their dream of business ownership.”
• Valerie Martinelli: “It’s about leadership. I am coaching women to become leaders, so I have to be one too.”
• Kaitlyn Carlson: “At first, I faced major imposter syndrome. I would ask my co-founder permission for everything and every time he would answer, ‘You're the CEO. You decide.’ Eventually, this response empowered me to start making executive decisions for the benefit of my company and my clients. In many ways, the title has forced me to step outside my comfort zone and play bigger than ever.”

If you’re the CEO of your small business, do these answers resonate with you? If you’re considering the title, what are the motivating factors and what do you hope being CEO will do for your company? Let me know in the comments.

Other news I’m reading:

A great deal of attention has been focused on regulating big tech over the past year. That trend will continue in 2020, but the focus will shift toward tech’s impact on small businesses. Google, Amazon and Facebook are often the ubiquitous means for local shops to reach customers, but those platforms have also been accused of undercutting competition with small businesses.

This is one of my big predictions for next year. What are yours? What are the #BigIdeas2020 you’re keeping an eye on that we should all be aware of? | Join the conversation

This is the final edition of 2019. I'll begin publishing again after the New Year. Happy holidays until then!