Aspiring entrepreneurs often dream of becoming their own boss, but the critical question arises: what title should you adopt? Selecting the appropriate title as the leader of your business is not merely a matter of preference; it can significantly influence how employees, lenders, and your target market perceive both you and your organization.
Titles like “CEO,” “Owner,” and “Founder” each convey unique meanings and are associated with particular business structures and roles. Understanding these distinctions is essential before establishing your title and presenting it publicly. At the very least, your title should accurately represent your responsibilities and be in harmony with your business’s structure.
Selecting Your Title
Here’s an overview of various title options available, organized in alphabetical order.
CEO (Chief Executive Officer)
The title “CEO” is often linked to larger organizations and does not necessarily indicate ownership. A Chief Executive Officer is generally responsible for the overall strategic direction, financial health, daily operations, and management of the company, serving as the primary spokesperson to stakeholders and the public. In larger corporations, CEOs typically report to a Board of Directors:
Using the title “CEO” implies a degree of organizational complexity and suggests a formal corporate structure. This can bolster your company’s perceived legitimacy, especially in dealings with investors and partners.
Notably, you do not need a formal corporate structure to use the title of CEO. Many entrepreneurs favor this title as it conveys authority and success.
Director
In larger corporations, directors are typically employees reporting to the CEO. A director holds some authority, yet the title can be somewhat vague and is often paired with specific responsibilities.
Your wording should reflect the nature of your business. For example, in creative fields, “Founder and Creative Director” might be fitting, whereas someone in tech may prefer “Owner and Technology Director.”
Chief Operating Officer (COO)/Director of Operations
This title is frequently used in larger companies and refers to the individual overseeing daily operations. In smaller businesses, owners might prefer titles like “COO” or “Director of Operations” to highlight their hands-on involvement. While “COOs” can be the top title, some may misinterpret it as being second in command.
Founder
The title “Founder” emphasizes your role in creating the business and highlights your entrepreneurial spirit and resilience. This title resonates strongly in the startup community, where innovation is highly valued. While being a “founder” signifies your commitment to the business, it doesn’t reflect your current responsibilities, so pairing it with another title, such as “Founder and CEO,” is typically beneficial.
General Manager
A “General Manager” oversees operations of either a part or the entirety of a company. When used alone, this title may imply reporting to a CEO, which makes it more effective when paired with titles like “Founder and General Manager” or “Owner and General Manager.”
Managing Director
The title of “Managing Director” often aligns with that of a CEO. The choice between “MD” and “CEO” is personal preference; some may view “CEO” as more appropriate for larger firms.
Managing Partner/Managing Member
Titles that include “partner” or “member” indicate partial ownership. A “managing partner” generally denotes ownership and management. “Managing members” are typically owners in an LLC.
Owner
The title “Owner” clearly signifies business ownership, commonly used in small businesses and partnerships. Owners have complete control over all business aspects and are responsible for relationships with vendors and clients. While straightforward, this title may lack the authority or structure implied by “CEO.” It may be wise to elevate your title as your business expands.
President
In small businesses, the “President” often also serves as CEO. Unlike larger companies, this title suggests ownership within smaller firms, carrying weight with external parties.
Principal
A “Principal” typically indicates you are a founder, owner, or CEO involved in the company’s management and decision-making. In small businesses, titles like “CEO,” “President,” and “Principal” are often interchangeable based on personal choice.
Proprietor
Using the title “Proprietor” is synonymous with being the “Owner” of a business. While this term is technically correct, it is somewhat outdated.
Legal Structure and Title Selection
The legal structure of your business significantly influences your title choices.
Sole Proprietorship
The simplest way to start a business, sole proprietorships don’t require state registration and remain informal. Owners report income and losses on personal tax returns. Due to personal liability for debts, sole proprietors may face challenges in securing loans.
- Typical titles: Owner, Proprietor
- “Owner” or “Proprietor” are commonly used titles for sole proprietorships, but any title can be chosen.
Partnership
Partnerships are formed by default when starting a business with others. Each partner shares ownership of the business’s assets and liabilities. While no special registration is required, normal permits and tax filings persist. Partnerships are treated as “pass-through” entities for tax purposes.
- Typical Titles: Partner, Managing Partner
- Choosing “Partner” is straightforward, while specific roles often adopt the title “Managing Partner.”
Limited Liability Company (LLC)
LLCs provide entrepreneurs with personal liability protection. They require minimal filing and registration, protecting members’ personal assets from business debts. LLCs offer flexibility in titles, including “Member,” “Managing Member,” “CEO,” or “President.”
- Typical Titles: Member, Managing Member, CEO, President
- The formal term is “Member,” but titles like “CEO” or “President” enhance clarity and professionalism.
Corporation
Business owners often opt for a C Corp for increased liability protection and easier capital raising through debt or equity. The formal structure offers clearly defined roles, including “CEO,” “President,” “Founder,” and “Chairman.” However, C Corps may encounter double taxation unless they elect S Corp status.
Choosing the Right Title
When determining a title, ensure alignment with your company’s legal framework and hierarchy. Your title should authentically represent your duties and responsibilities.
Consider your company’s growth trajectory and how it will be perceived by outside parties, such as customers and investors. A well-chosen title can enhance professional credibility and instill trust. Finally, study industry standards for titles to gauge their impact on your reputation.
Ultimately, the right title establishes authority, fosters trust, and communicates your role within the organization effectively. Opt for a title that resonates with your vision and the message you wish to convey to employees, investors, and clients.
