People often think of family businesses as small “mom-and-pop” establishments, but some of the largest corporations are family-owned and operated. How do these businesses become and stay successful then? Here are four major concepts to keep in mind to ensure your family business prospers.
1. Education and Experience Matter
Family businesses that value and prioritize experience and education succeed and survive for generations. Successful family businessman and international banker Julio Herrera Velutini recognizes that you cannot simply rely on being a family member to prevail, but that you have to work hard and continually gain new experiences and learn new practices. The simple fact that the business runs in the family does not mean it will take no effort from you to keep it going strong, in fact, it often takes more work and care. It is also important to learn business management skills along with the specific talents and knowledge required for the family profession so that you are the leader your family business demands and deserves.
2. Transparency and Clarity Triumph
Miscommunications and misunderstandings are some reasons why family ventures fail. Of course, some disagreements and disputes are inevitable, but setting early boundaries and maintaining good communication helps. If owners, members, and employees are upfront and clear about their desires and expectations then any discrepancies can be better handled and resolved. This also means treating every employee and family member fairly. Fairly does not mean providing jobs for people out of sympathy though. It is still important to value experience and education amongst everyone involved and recognize and effectively communicate when someone or something is an ill fit.
3. Written Words Count
Writing everything down helps ensure any discords that do arise will be handled efficiently and equitably. Human recollection is fallible and variable so recording minutes for every meeting and writing down all conversations helps defuse many situations and dispel confusion. Having written records of all policies, procedures, goals, and plans takes supposition and personal preference out of the decision-making process. Written records also serve as evidence for why certain decisions are made if a decision is ever challenged.
4. Looking Ahead and Welcoming Change Reign
Part of running a business is planning for the future and for family-controlled operations this is even more important. Succession plans are paramount in family-run companies. You must consider each family member carefully and place the business in the best hands possible for the future. It is also important to recognize that the best leadership for the company may lie outside the family. Whatever the case, the earlier you can establish how the business is going to be passed on the better. Further, be prepared to accept that some family members may not want to be involved in the business at all. Forcing disinterested individuals will never work out in your favor and turning away interested and capable non-family members could be detrimental.
Overall, family-run businesses make some of the best and most enduring businesses, but it takes a lot of hard work, dedication, and efficient planning. Use these tricks of the trade to sustain, improve, and lead your family trade into the future.