Tips For Running A Family Business

Many family businesses struggle to survive the generations as new technology, new trends and new business models take their toll. Family members often stay in senior roles longer than other business leaders, which can stifle change and limit success. But there are things family businesses can do to thrive.

It’s all about the children

Some family firms assume the children will become involved which can lead to a situation where the people running the business would rather be doing something different.

Alternatively, children can lead their own lives with the knowledge they can fall back on the family business if they fail in their own endeavours.

As a result and in spite of failure in other pursuits family members are often welcomed back to senior positions, which can lead to the development of a weak top management team.

Such scenarios are commonplace and emotionally understandable but must be tightly managed to avoid the introduction of bad habits that damage the business.

Ground rules should apply to ensure returning family members have the right training or amassed enough experience at a senior level with other organisations.

Family members often assume the business will expand to look after everyone but as the generations grow it is not always possible to create enough jobs.

To address the issue it is necessary to introduce a selection process that limits the number of family who enter the business and plan growth strategies for those who join.

Setting the ground rules

Without such discipline the business will not be able to cater for those who can add value and will struggle to balance the competing demands of the family and the market.

Family members often follow in the footsteps of their parents when it comes to their particular skill sets and areas of interest, which can lead to a dearth of skills and experience in other areas.

As a result, an over or under supply of skills can develop in certain disciplines, which needs to be addressed to ensure the company develops in a balanced way.

To minimise the issue it may be necessary to appoint non-family members with experience and expertise in complementary disciplines to ensure the correct mix of skills within the company.

Family businesses will always operate differently from non-family businesses but once a number of key issues are tackled they can be as successful.

They also have an added advantage as they can take more considered and long-term decisions, particularly in times of trouble and turmoil.

To survive, however, family businesses must recruit family and non-family members most suited to the interests of the business rather than the family.

So, family businesses are here to stay but more will succeed if they follow the rules of non-family businesses and recruit the best people.