Choosing the right title as the leader of your business is crucial. It can affect how you and your company are perceived by employees, lenders, and your target market.
Titles like “CEO,” “Owner,” and “Founder” have different meanings and implications, so selecting the right one is important.
Common Titles and Their Implications
| Title | Commonly Associated With | Key Responsibilities |
|---|---|---|
| CEO | Corporations, larger companies | Strategic direction, financial health, spokesperson |
| Director | Larger organizations | Specific departmental oversight |
| COO | Larger companies, operations | Daily operations, reports to CEO |
| Founder | Startups, entrepreneurial ventures | Establishing the company, visionary roles |
| General Manager | Various businesses | Overseeing operations, might imply subordinate role |
| Managing Director | Small to large companies | Similar to CEO, management of business |
| Managing Partner | Partnerships | Ownership and management |
| Owner | Small businesses, sole proprietorships | Complete control and oversight |
| President | Companies of various sizes | Leadership, often ownership in small companies |
| Principal | Small to mid-size businesses | Founder, direct management involvement |
| Proprietor | Sole proprietorships | Owner, somewhat old-fashioned term |
Choose Your Title
Here’s a look at several common titles, arranged alphabetically.
CEO (Chief Executive Officer)
The title “CEO” is linked with corporations and big organizations. It doesn’t necessarily mean the person owns the company.
A CEO is responsible for the company’s strategic direction, financial health, daily operations, and management. They are often the main spokesperson for stakeholders, investors, employees, and the public.
In large companies, CEOs usually report to a Board of Directors. Using “CEO” implies a complex organizational structure and can enhance the company’s perceived legitimacy and professionalism.
Director
In larger companies, directors report to the CEO. The term “director” reflects a certain level of authority but is somewhat vague.
Combining it with other words can clarify responsibilities. For example, a creative business owner might be “Founder and Creative Director,” while a tech business owner might use “Owner and IT Director.”
Director of Operations / Chief Operating Officer
This title is common in larger companies to denote the person overseeing daily operations.
In small businesses, owners may use the title “COO” or “Director of Operations” to show they are hands-on with operations. While a COO typically reports to the CEO, in smaller companies, they might be the top person.
Founder
The title “Founder” highlights the person who established the company. It underscores entrepreneurial spirit and vision.
In the startup community, this title is especially potent. Although “Founder” points to the origin of the company, it doesn’t indicate current involvement. Combining “Founder” with another title, like “Founder and CEO,” can clarify roles.
General Manager
A “General Manager” can oversee part or all of the business, managing operations to keep things running smoothly.
While this title usually implies reporting to a CEO, in a small business, it might be combined with another title, such as “Owner and General Manager.”
Managing Director
“Managing Director” or “MD” is often synonymous with “CEO.” Some business owners prefer “MD” as it feels more in line with leading a smaller company. The responsibilities and implications are similar to a CEO.
Managing Partner / Managing Member
These titles suggest ownership and management. A “Managing Partner” often means owning and running the business, usually with other partners. “Managing Member” is common for owners of a limited liability company (LLC).
Owner
The title “Owner” clearly indicates ownership of the business. It’s straightforward and often used in small businesses, sole proprietorships, and partnerships.
Owners have complete control and oversee daily operations. However, the title may not convey as much authority as “CEO.” As the business grows, combining “Owner” with another title might be beneficial.
President
A “President” might also be the CEO in small businesses. While in larger firms, it might not indicate ownership, in smaller companies, it often does.
The title “President” carries significant weight with outsiders, such as vendors and partners.
Principal
“Principal” generally indicates a founder, owner, or CEO. Principals are involved in managing daily operations and decision-making.
In small businesses, this title is often interchangeable with “CEO” or “President,” based on personal preference.
Proprietor
“Proprietor” is similar to “Owner” and primarily used in sole proprietorships. While the term is somewhat old-fashioned, it still clearly conveys ownership.
Legal Structure and Title Selection
The business’s legal structure can influence title selections.
Sole Proprietorship
This is the simplest business structure. There’s no need to register with the state, and income and losses are recorded on personal tax returns.
However, because the owner is personally liable for the business’s debts, obtaining loans or investments may be more challenging.
Typical titles: Owner, Proprietor
Partnership
In most states, starting a business with others typically means forming a partnership unless you file otherwise.
Partners share equal ownership unless stated otherwise in a partnership agreement. Partnerships, like sole proprietorships, are pass-through entities for tax purposes. That means profits and losses are passed through to partners’ individual tax returns.
- Titles: Partner, Managing Partner
- Responsibilities: Shared ownership of assets and liabilities, decision-making, and direct involvement in operations.
Corporations and LLCs
Corporations
Incorporating a business offers liability protection because the entity is separate from the individual. However, it comes with more regulatory requirements, such as having a board of directors, holding meetings, and maintaining detailed records.
- Titles: CEO, President, Director, CFO (Chief Financial Officer), COO
- Responsibilities: Strategic direction, financial oversight, compliance with regulatory requirements, and managing shareholders’ interests.
Limited Liability Companies (LLCs)
LLCs offer liability protection without the extensive regulations of a corporation.
Owners are called members, and an LLC can be structured to have managing members.
- Titles: Managing Member, Member, CEO
- Responsibilities: Daily operations, strategic planning, and compliance with state regulations.
Special Considerations for Startups
Choosing Titles for Startups
In startups, titles can be more fluid to reflect the dynamic nature of the business. Founders might take on multiple roles, and titles can evolve as the company grows.
- Flexibility: Titles can change as the company scales
- Multiple Roles: Founders often wear many hats, from CEO to Head of Product
- Evolving Titles: As the team expands, roles and titles can become more specialized.
Importance of Titles in Investor Relations
Accurate titles can positively impact investor relations by signaling professionalism and readiness. Investors view organized leadership structures favorably.
- Investor Confidence: Clear titles can build trust
- Professionalism: Reflects a well-structured organization
- Strategic Alignment: Titles should align with business goals and investor expectations
Tips for Choosing the Right Title
- Reflect Your Role: Choose a title that best represents your responsibilities and involvement in the company’s operations.
- Consider Perception: Think about how your title will be perceived by others, including employees, partners, investors, and clients.
- Legal Implications: Ensure that your title aligns with the legal structure of your business and any regulatory requirements.
- Future Growth: Select a title that can evolve as your business grows and your role changes.
- Consistency: Maintain consistency across business documents, communications, and marketing materials.
