A career in business leadership can be meaningful as well as lucrative. Whether you dream of becoming the chief executive officer (CEO) of a major company or hope to open your own small business, leadership requires a great deal of skill and hard work. However, the specific duties associated with being a CEO or business owner can vary widely. What are the key differences between the two positions?
What Is a CEO?
The CEO is the highest position of leadership in an organization. Strategic planning, impactful decision-making and effective leadership are all involved in this position, but the definition of CEO duties can vary between organizations. Ideally, the person in the position of CEO is highly experienced in the company's industry, with in-depth business acumen and excellent communication skills as well as the ability to inspire others.
While there are many perks that come with being a CEO, the position also holds a great deal of responsibility. Many CEOs work long hours and may have to travel for work frequently. Additionally, major decisions that impact the future of the company are typically made by the CEO, meaning they are also held accountable for the results of any decisions they make.
Often, CEOs are chosen by the company's board of directors. CEOs also deliver regular reports on the business to the board. Depending on the size and role of the business they lead, CEOs may also spend time interacting with the public.
What Is a Business Owner?
Owners of small businesses are very hands-on. They are often involved in the day-to-day operations of their companies and may engage in customer service, budgeting, payroll, employee support and more. They also develop business plans and make strategic decisions for the future of their company. Successful business owners are excellent communicators and skilled in leadership, problem-solving and time management.
Business owners also take on a great deal of risk. If their business fails, they may face financial hardships and even bankruptcy. The amount of risk an owner takes on is influenced by many factors, including the nature of their ownership. For example, owners of limited liability companies (LLCs) are less liable for business failure than are owners of sole proprietorships. For this reason, it's important for business owners to plan carefully. When it comes to business and financial decisions, a wrong step can lead to the closure of the business.
Comparing a CEO vs Owner of a Business
While responsibilities of a CEO and the owner of a business may sometimes overlap, the two positions have distinct roles. Business owners have a financial stake in the business. They may be the sole owner or a part-owner if they share ownership with one or more other people. Occasionally, the owner of a business may even act as the CEO – this is especially common for new or small businesses.
In larger, established corporations, the owner(s) and the CEO are typically different people. While the CEO is heavily involved in decision-making and business operations, the business owner will possess a smaller role in the day-to-day business. The owner may sometimes consult with the CEO, but more often, they take a less hands-on approach.
The profit that business owners receive from their businesses is commensurate with their percentage of ownership. They are also responsible for the business's tax liability and shoulder the risks associated with ownership. If a business has only one owner, they hold the entirety of the business' profit, tax liability and risks; one well-known example of this is the company Dyson, which is owned entirely by Sir James Dyson.
What Does a CEO Do?
While a CEO's specific job duties will vary based on the industry in which they work, most people in this role have at least a few responsibilities in common:
- Lead the strategic planning process and guide business operations to align with the company's strategic plan.
- Oversee and evaluate the performance of other top leaders in the organization.
- Communicate with the company's board of directors and/or shareholders regularly.
- Engage in high-impact decision-making that affects the future of the business.
- Possess responsibility and accountability for the performance of the business while CEO.
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What Is the Average CEO Salary?
CEO salaries vary based on several factors. The location and size of the company can impact how much money the CEO makes, as does the individual CEO's level of experience and education. As of 2023, chief executive officers earn a median of $189,520 per year, according to the U.S. Bureau of Labor Statistics (BLS). The BLS reports that the highest-paying industries for CEOs include manufacturing, technical services and health care.
What Does a Business Owner Do?
Like the CEO, any individual business owner's daily tasks will vary based on the industry they work in. The size and location of the business will also influence the owner's duties. However, these responsibilities are common among many business owners:
- Create and manage the budget, and ensure business operations remain within the budget.
- Write job descriptions, interview and hire employees to carry out business operations.
- Ensure that the business meets all federal, state and local regulations, including licensure requirements.
- Design the business plan and evaluate the plan regularly to ensure business operations match the overall business strategy.
- Make all major decisions for the business, and solve business-related problems as they arise.
What Is the Average Business Owner Salary?
Business owners earn a wide range of salaries based on the size, type and success level of the business, among other factors. According to Indeed, business owners earn an average of $106,519 in 2023. While the average salary is significantly lower for business owners than for CEOs, many people find that the satisfaction of owning and operating their own business makes up for the lower salary.
The Value of an MBA for Both CEOs and Business Owners
Earning a quality education is one of the most important steps in preparing for a successful career. Whether you're interested in starting your own business or working your way up to CEO of a major company, an MBA can help you reach your goals. According to Business Because, 69% of CEOs in the United States have an MBA – a testament to the value of this degree in the business world.
Earning an MBA takes commitment, but it doesn't mean you have to put your life on hold. At Ohio University, you can study online and complete an MBA in as little as two years while working, pursuing promotions or growing your business. Additionally, you can further customize your learning by choosing a modality that best suits your learning style: online MBA vs. Professional MBA.
Ohio University has also designed concentrations with industry demands and earning potential in mind. Choose an MBA concentration in Finance, Health Care, Executive Management, Business Analytics, Operations & Supply Chain Management, Accounting, Project Management, Strategic Selling & Sales Leadership or Business Venturing & Entrepreneurship to graduate with a degree that's built to support your growth.
According to a 2021 exit survey with Ohio University MBA graduates, 43% of respondents had already received a pay increase and 36% had already earned a promotion. If you're serious about becoming a leader in business, earning the right education is your first step. Learn more about Ohio University's online MBA and apply today.
Sources
American Federation of Labor & Congress of Industrial Organizations. "Highest-Paid CEOs." Retrieved Nov. 3, 2023 from https://aflcio.org/paywatch/highest-paid-ceos
Hayes, Adam. "Chief Executive Officer (CEO): What They Do vs. Other Chief Roles." Investopedia. Apr. 12, 2023. Retrieved Nov. 3, 2023 from https://www.investopedia.com/terms/c/ceo.asp
Payscale. "Average Chief Executive Officer (CEO) Salary." Retrieved Nov. 3, 2023 from https://www.payscale.com/research/US/Job=Chief_Executive_Officer_(CEO)/Salary
Zippia. "What Does a Business Owner Do?" Retrieved Nov. 3, 2023 from https://www.zippia.com/business-owner-jobs/what-does-a-business-owner-do/?src=chatbot_popout_displayed
Fallon, Nicole. "Entrepreneur Salaries: How Much Should You Pay Yourself?" Business News Daily. Retrieved Nov. 3, 2023 from https://www.businessnewsdaily.com/9213-business-owner-salaries.html
Indeed. "Business owner salary in United States." Retrieved Nov. 3, 2023 from https://www.indeed.com/career/business-owner/salaries
U.S. Bureau of Labor Statistics. "Top Executives." Sept. 6, 2023. Retrieved Nov. 3, 2023 from https://www.bls.gov/ooh/management/top-executives.htm#tab-5
Kefford, Matt. "Why Over 20% Of The World’s CEOs Have MBAs." Business Because. Sept. 16, 2022. Retrieved Nov. 3, 2023 from https://www.businessbecause.com/news/mba-jobs/8328/ceos-with-mbas
Hayes, Adam. "What Risks Does an Entrepreneur Face?" Investopedia. Nov. 13, 2022. Retrieved Nov. 3, 2023 from https://www.investopedia.com/ask/answers/040615/what-risks-does-entrepreneur-face.asp#:~:text=Entrepreneurs%20face%20multiple%20risks%20such,creating%20a%20realistic%20business%20plan
Leonard, Kimberly & Bottorff, Cassie. "6 Types Of Business Ownership: Definitions, Pros & Cons." Dec. 5, 2022. Retrieved Nov. 3, 2023 from https://www.forbes.com/advisor/business/types-business-ownership/
Zippia. "Who Owns Dyson?" Aug. 21, 2022. Retrieved Nov. 3, 2023 from https://www.zippia.com/answers/who-owns-dyson/
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