When Should a Small Business Hire an Executive Team?
When starting a new business, you’ll likely wear many hats. It isn’t unusual to act as CEO while also tackling marketing tasks and coordinating operations. As you find your footing and begin to scale, you might feel ready to hire a formal executive team.
The right C-suite positions for your business will depend on your unique needs, budget, and long-term goals. What’s right for one company may not make sense for another, but the goal is always the same — to hire talent that will ultimately help the business thrive.
With that said, here’s a closer look at when — and how — to hire an executive team.
When is the right time to hire an executive team?
The answer depends on what your current operations look like. If you’re in startup mode and have limited working capital to cover your operating expenses, you may be bootstrapping your way through the early days. That often involves working long hours and keeping your costs lean.
But there comes a time when bringing on executive leadership is the reasonable and right next step. Think of it as an investment in your company — you’re dedicating resources (compensation) to highly skilled employees who will hopefully bring your business to the next level.
Another benefit of filling executive leadership roles is that doing so will likely free up time you can spend on other things. Instead of getting bogged down with social media strategies, for example, your chief marketing officer can now handle it. This allows the business owner to focus on what they do best—running their business.
What does the C-suite look like?
The nature of your business will determine which executive leadership positions make the most sense. According to employment resource Indeed, that may include some of the following:
- Chief executive officer (CEO): This is the top position within a company. The CEO is a key decision-maker who oversees all other departments and guides the overall direction of the business.
- Chief financial officer (CFO): As the name implies, the CFO is responsible for major financial tasks. This typically includes reviewing financial reports, overseeing budgets, managing overall financial planning, and more.
- Chief technology officer (CTO): This executive ensures technology initiatives are running smoothly and supporting overall business goals.
- Chief marketing officer (CMO): This person is tasked with creating and executing the company’s marketing strategies. This typically includes doing market research and carrying out targeted marketing campaigns.
Don’t be afraid to think outside the box here. Depending on your business, you may need an executive-level role unique to your organization — like chief creative officer or employee well-being executive. The good news is that you get to decide what your executive leadership team looks like. What matters most is communicating expectations for each role.
What if I can’t afford to expand yet?
It goes without saying that C-suite positions can be costly. Compensation for executive leadership positions is generally six figures. If your business is on a tight budget, you may choose to fill these positions gradually, prioritizing whatever is most in demand. Think about what your business needs to grow and start there.
You may consider outsourcing key tasks to competent consultants who do the work without being full-time employees. For example, if your company has reliable bookkeeping software, you might choose to work with a freelance accountant to handle key financial responsibilities. That could temporarily eliminate your need for a CFO.
Depending on your organization, there may be traditional executive leadership roles that simply don’t apply to your business. You may also be a business owner who enjoys certain hands-on tasks. Handling some executive-level responsibilities yourself could make organizational sense (and save you money).
All of this is to say—there isn’t one right or wrong way to build your executive team. The important thing is that you analyze your business need and forecast when to introduce the additional expense.
How to hire an executive team
When looking for new employees, experience and capability are always top of mind. This is even more true when filling executive leadership positions. LinkedIn recommends narrowing your search to candidates who:
- Have eight to 10 years of corporate management experience under their belt
- Have an entrepreneurial mindset
- Have been successful in past leadership positions
- Showcase the ability to be strategic
- Can easily communicate their vision and expectations
Once you know what you’re looking for, you can rely on your internal recruitment processes to find qualified candidates. Alternatively, you may choose to partner with a recruitment agency that specializes in executive leadership positions. Just be sure that your compensation and benefits packages are competitive enough to attract high-caliber candidates.
This goes hand in hand with retention. Once you’ve filled these roles, how will you continue to incentivize your executive leadership team? Incorporating a bonus structure, for example, can provide built-in motivation.
Striking the right balance
Going all in on your executive team can have a lot of benefits. The idea is to build a team of functional experts who are all working toward shared goals. Just don’t forget about the rest of your organization.
If your company is too top-heavy, a disproportionate number of resources may be flowing toward executives. Investing in your everyday workers is just as important.
According to McKinsey & Company, when employees feel like their company’s purpose lines up with their own purpose, they’re typically more engaged at work. It also appears to strengthen employee loyalty and their willingness to recommend the company to other people. Translation: It might be worthwhile to tap into your employees’ values.
What’s important to them? And how might you align these values with their work? Investing in employee development is equally important as building out an executive team.
That might mean offering employee workshops and training, resource groups, mentorship opportunities, and more. Investing in your workers can also help bridge any communication gaps between workers and executive management.
Building a solid executive team won’t happen overnight. What matters most is leading with your business’s needs and goals — and staying true to your company values along the way.