When should an owner cede control?

(FSB Magazine) -- Dear FSB: I co-own a thriving tanning salon, which is usually well run by our stellar employees and only rarely requires an owner to be on site. We want to hire a manager or promote one from within so that we can focus on starting a new venture. When is the right time to do that?

- Dan Snyder, Co-Owner Outer Glow Athens, Athens, Ohio

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Dear Dan: If you're already rarely on the premises, then the right time is now. Because you value your current workers, promoting a staffer may make the most sense. "Start to give that employee more responsibility while easing yourself out," says Judith Cone, a vice president at the Kauffman Foundation (kauffman.org), a Kansas City, Mo., nonprofit that offers training and other resources for entrepreneurs.

To decide who is best for the job, list the ideal traits of your new manager. Then see which worker most closely matches them. "Don't promote anyone who doesn't already have the team's respect - a bigger title won't magically confer it," says Cone.

Are you happy with the manager you hired to run your business?

If you choose an outside hire, break the person into the job slowly - with perhaps a 60-day probation period. After a few months under the new regime, "really listen to your employees," Cone suggests. "If this person is a bad fit, believe me, they will realize it. I know an owner who was so eager to dodge day-to-day business operations that he turned his company over to two staffers who quickly ran it into the ground. If he had asked his employees and customers - and really wanted to know the truth - he would have heard alarm bells after the first six weeks."

Be sure to set standards for measuring your new manager's performance, and link at least part of her pay to it. "This offers an incentive, and forces you to set clear performance measures, such as growing sales by 5% a year," says Cone. And how will you keep tabs on what goes on in your absence? What information should the new boss provide you with, and how often do you want reports?

"The challenge is to strike a balance between monitoring the business and giving the manager autonomy," Cone notes. "As long as you and your partner still own the company, you're not really turning it over to someone else - you're just running it differently." While you're excited about your next venture, try not to get so wrapped up in it that you let this one slide.