Is your dream to own a family business?
Understanding the family business
The aim here is to provide you with ideas and concepts, to not only deliver good outcomes for family oriented members but also give ideas to improve the overall performance of the family businesses.
You will find some discussion points, should you be interested in nurturing business opportunities amongst the members of a family.
The keys to growing and maintaining healthy family relationships are trust, strong family values, purpose and open communications. All these things are assisted by a successful business that is financially viable and sustainable.
There is a big connection between families and business. If you start or join a family business, as a family member you’re likely to benefit from a range of advantages which you often don’t find in other enterprises.
- 51% of all businesses are family businesses.
- 61% employing 5-9 people are family businesses.
- 19% employing over 500 people are family businesses.
- 50% of family businesses do not pass to the second generation.
Fun or frustration
A family business can be a two-edged sword:
On one hand
- Families tend to stick together.
- Family members can, in most cases, be trusted.
- There can be a lot of fun.
- There can be additional rewards in seeing the family prosper.
- There are fewer problems with industrial relations.
On the other hand
- There can be a lot of frustration with various members.
- Some members can be difficult to motivate.
- You can’t hire and fire family members easily.
- Family members can become complacent about the status quo.
- A business can become a financial nightmare for the family.
“If a person is approaching retirement with a sense that he needs to make a big splash to make up for lost time, it’s highly likely to be a misguided effort”. Dave Juday
Key family businesses issues for discussion
Unaddressed issues can be like a time bomb.
[read more=”Personal Experience” less=”Personal Experience”]
I have found that a lack of interest among family members can be a big issue, and not always easy to solve. I have been involved with family businesses that really need a proper succession plan because of the complexities emerging with growth, or lack of it.
The young people are all for it because they are looking for more stability or direction. While the older members take if for granted that everything will simply work out over time, which of course they rarely do.
Sometimes, family members aren’t truly interested in joining the family business but do so anyway because it’s expected of them. The result is apathetic, unengaged employees. In the normal businesses, employees that fit into this category would simply be fired. This is not so simple at the family firm.
Once a business is well established it can be difficult and very expensive putting in a formal succession plan, which is why many shy away from it. If you leave it to the last moment it is always harder and more expensive. It is best, therefore, to start a succession plan as soon as possible so that the costs are spread over a number of years and discussions stay more fluid and with far less conflict.
Like most successful projects if you start with the end clearly in mind and with an appropriate timeline, the project usually runs smoothly and everyone benefits.