Business Strategies

Running a family owned business is never a walk in the park. There is always so much to sacrifice and as many mistakes to deal with quite often. What is worrying is that a large percentage of these businesses do not make to survive long enough to the succeeding generation. To succeed with a family business, assessing the role players’ strengths and goal setting among other things are some of the considerations that are inevitable.

Getting into business with your loved ones might sound like a dicey proposition, particularly when you look at the statistics. Roughly 70 percent of family-run businesses don’t make it to the next generation. And in the event of failure, you have more than your immediate family to worry about.

Identify strengths.

Determine exactly what knowledge and skills each person can contribute to the business, then accept those strengths for what they are. If you’re terrible with numbers but your brother happens to love bookkeeping, just be happy that you’ve got your bases covered.

Set clear expectations.

Knowing everyone’s strengths will help define roles in the organization. Who’s in charge of marketing? What about hiring? Are you better suited to handle operations or close business deals? No matter where the responsibilities fall, set expectations and establish boundaries for each role. You don’t want someone playing in your sandbox when he’s got his own.

Never take work home. I’m a strong believer that lunch is for work and dinner is for family. When your family gathers for celebrations, make them about family, not business. Other members of your family don’t necessarily want to hear what happened at your last meeting, so don’t subject them to business talk.

Starting with clearly defined roles and the readiness to do what needs to be done to succeed, you can build a healthy family business without messing up your family dynamic. As long as everyone knows what he or she is responsible for, there should be no hard feelings outside the office when someone is asked to step up their game.

Sourced from: https://www.entrepreneur.com/article/237338

To hand over a family business from the head of the business to another one takes a lot. The family needs to take a closer look at the business succession hand-over process, lest the family stumbles over the time and this drastically affects the business. Statistics indicate a large number of these business do not make to last long, with this failure being blamed on the poor succession techniques used by many families.

For most family and closely held businesses, planning for succession is the toughest and most critical challenge they face. Yet succession planning can also be a great opportunity to maximize opportunities and create a multi-generational institution that embodies the family’s values and mission for generations to come.

The Family Business Institute assists family owned businesses in multi-generational planning by helping them address issues related to not only the ownership succession but also management succession planning and leadership development as well.

88% of current family business owners believe the same family or families will control their business in five years, but succession statistics undermine this belief. According to The Family Firm Institute, only about 30% of family and businesses survive into the second generation, 12% are still viable into the third generation, and only about 3% of all family businesses operate into the fourth generation or beyond. There is a disconnect between the optimistic belief of today’s family business owners and the reality of the massive failure of family companies to survive through the generations. Research indicates that failures can essentially be traced to one factor: an unfortunate lack of family business succession planning.

Sourced from: https://www.familybusinessinstitute.com/consulting/succession-planning/

When an entrepreneur dies, the hardest time in managing family business checks in. This is the time where most business firms dwindle and many even collapse. The decisions that the family members have to make, the compensation and other necessities that ensue are challenges that not many people manage to maneuver and come out successful in making sure they see the business through another generation.

Making tough decisions

After a late entrepreneur’s death, grief-stricken family members must make tough decisions about what to do with his or her business. The dual challenge of a leadership transition in the midst of a family crisis throws many family firms off balance.

Fair compensation

Compensation can be a can of worms in any company. Family businesses, though, have an especially tough time devising payment schemes that are fair and — just as important — perceived as such.

Staving off resentment

Part of the reason a family business exists is to benefit the family. It’s something all employees should understand, but heads of family firms must be careful not to alienate those employees who come from outside the clan.

Sourced from: http://www.businessnewsdaily.com/862-family-business-challenges.html