Last Updated Jan 25, 2011 2:27 PM EST
Five percent may sound like a lot, but how much less would your business be worth without you? For many business owners who are too involved in day-to-day operations, the answer would be a lot more than 5%. In fact, a business dependent on its founder is worthless if the owner leaves.
One of the reasons for the relatively mild hit on Apple's stock (it dropped only 2.3% on the Nasdaq that Tuesday) was that the market knows Jobs has Tim Cook, his chief operating officer and second-in-command, to run things. While arguably not the product visionary that Jobs is, Cook presided over Apple during Jobs's previous medical leaves, and the company continued to grow.
Like the Leo McGarry character in "The West Wing," your second-in-command has the role of running your operation and thereby protecting your time to make strategic decisions. And you don't have to be the leader of the free world or Steve Jobs (sometimes I wonder if they are the same person) to hire a second-in-command.
I think a five-employee company can benefit from a 2iC just as much as a giant can. The question you need to ask is "What is the opportunity cost of not hiring a second-in-command?"
Let's say, for example, you can hire a second-in-command for $200,000 a year. A lot of money, I know, but how quickly could you make that salary up if you were freed from the day-to-day operations of your business? Could you generate $500,000 in sales? About another million in sales? How about two million?
If you could dedicate all of your time and energy to growing your business, instead of dealing with the minutiae of running it, what kind of return could you get on $200,000 invested per year? Only you can be the judge, but asking yourself the question is worthwhile.
I'm curious -- have you hired a second-in-command?
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