5 Reasons for Thanking Your Small Biz CEO

Last Updated Nov 26, 2008 2:58 PM EST

brent_frei.JPGIn this BNET Intercom guest post, Smartsheet chairman Brent Frei shows how the much-harried small business CEO is different from his Fortune 500 counterpart -- in all the best ways.
With all the negative press around CEO pay, golden parachutes and extensive kickbacks for executive management, it would be a good time to stop and take a look at your own reality. Most will find a large contrast between the news media stereotype CEO and your small business boss. CEOs in small businesses are often the hardest working team member, they have their own money at stake, they endure the risks and liabilities of employing others, and they pour their heart and soul into their business while sacrificing family and personal time.

So before you assume expensive retreats and a third home in the Caymans are on your small business leader's mind, take a look at what he or she is dealing with daily and compare it to your toughest issues at work:
1. The cup is half emptier No matter what business you are in, revenues are harder to come by. Consumers are getting increasingly stingy in opening their pocket books and businesses are thinking twice before adding line items to their budget. The business plan is predicated on certain minimum revenues. Missing that target will force re-planning and reductions.

2. Trim the bone The luxury of only trimming the "fat" or the discretionary spending is a fair ways back in the rear view mirror. Seventy percent of the average small business's expenses are headcount costs. This year on average, health care premiums are rising by 18 percent (if your small business isn't cutting health care extensively, you should be grateful). Corporate income taxes and payroll taxes will likely rise in the next year as well. That means your boss is spending more to maintain your salary at the same level. According to the NFIB, taxes and insurance rank second and third on a list of what small business owners are worried most about (sales is number one).
3. Do we have enough gravy? Preservation of employees and programs requires operating cash. Shortfalls in revenue and increasing expenses are forcing decisions by small business owners about dipping into their own pocketbook to further fund business operations. With investment dollars hard to come by in 2009 and tightened lending criteria, venture capitalists and bankers are counseling companies to cut headcount and stretch existing dollars as far as possible.
4. How to tell the kids you won't be home for dinner (again) During rough economic times, the small business owner's family takes a back seat. With the business requiring more dollars, time and energy, the role of husband, wife, dad or mom often comes second to keeping the business afloat.

5. Feeding as many as possible Headcount reductions are a likely necessity -- firing good employees is the most emotionally destructive job a CEO has. Job alternatives are getting scarcer every month. Citigroup to lay off 53,000, Circuit City, CompUSA, Starbucks, to close 100 stores,... Keeping as many of the great employees onboard and safe as possible puts increased pressure on items 1 to 4. No small business CEO will let go of the productive folks. In fact, increased responsibility and pay are often an outcome for those employees that both understand the CEO's challenges and make themselves a bigger part of the solution.

The press makes hay with the very public examples of the fat cat executive hubris atop select Fortune 500 companies. The occasional medium or small business exec is also caught with his or hand in the cookie jar. I'll be curious to see if any writers have the perspective to write about how underpaid the CEOs are that are capable of guiding their businesses through stormy seas. For those CEOs that do so, the old adage, "that's why they make the big money" should be more than a tongue in cheek comment.


Currently, Brent Frei is the chairman of Smartsheet.com, an online work management tool for teams. His background as an entrepreneur started in 1994 when he left Microsoft and founded Onyx Software in his basement. (Self funded, starvation wages, and plenty of Costco Ravioli.) Onyx went public in 5 years. Brent is also the co-author of the "The Power of Done," a book on productivity.