Are you considering a job as CEO of a small startup? It’s a terrific opportunity to boost your resume while demonstrating your leadership skills. It’s also a huge challenge that will require a lot of your time. Should you take the job? Here are four things to understand before taking on a role as the CEO of a startup.
Low Pay
Image via Flickr by 401(K) 2013
While you’ll infrequently find a startup that has terrific funding, most new enterprises have little cash. The expectation these companies have for their CEO is that you’ll work for little pay at first. As the business grows, you’ll become the beneficiary who rides that wave to financial glory. Your payments will increase, and you might even receive stock options that become lucrative in future years.
The downside is that your current financial position must sustain you during the period of low salary. Prior to taking a job as a CEO, you must take a detailed look at your finances to verify that you can afford this risk. You should also weigh the benefit of eventual gains. If you guide a startup to steady growth, you’ll garner the attention of larger companies. You could even earn the position of CEO at a larger corporation with an impressive performance at a startup. You’re deciding whether you can survive and thrive with a limited bankroll.
Long Hours
The maxim about the leader of an organization is that he or she has to turn on the lights in the morning and turn them out in the evening. A CEO works an average of 57.8 hours per week including 2.4 hours each weekend. Excluding the Saturday and Sunday hours, that’s an average 11.1-hour weekday. Also keep in mind that this total doesn’t include transportation to and from the job. Should you accept the title of CEO, you’ll spend half of each weekday either commuting or working.
Due to these work demands, you’ll have little if any social life and your home life will also suffer. If you have a family, you should discuss whether everyone is comfortable with that much demand on your time. You should also understand that CEOs have a higher divorce rate than the average married person.
Massive Stress
The buck stops with you. You’re the decider who accepts responsibility for all phases of the company. Should anything go wrong, no matter how firewalled you are from the circumstances, you’ll receive the blame. Anticipate the stress you’ll suffer in knowing that everything is your fault. Before accepting, consider how well you handle stress now. Then think about the most stressful events of your life and how well you functioned in those circumstances. You may not want that level of aggravation.
Management Skills
Literally everyone in the company will work for you. Should you not deal well with others, especially strangers, you’ll struggle as a CEO. More important, you’ll feel miserable every day at your job. Before accepting, ask the people who have worked with you what they think of your management skills. Only go ahead if you receive consistent positive feedback about your leadership ability.
Accepting a CEO title comes with many potential benefits. Many negatives exist as well. Carefully consider the issues above before accepting your new position.