There’s an argument to be made that the family-owned business is the most important part of the US economy. Just look at these numbers:
- 90% of American businesses are family-owned or controlled
- 60% of the US workforce is employed by a family business
- Family businesses create 78% of all new jobs
At Andy Stern’s Office Furniture, we know the importance of (and difficulties facing) the family-owned business. If you think you’re up to the challenge of creating a successful family business, read on!
Build A Better Business With Family
If those numbers don’t impress you, you’ll have to take it from us: starting and running a family business comes with many benefits that can make it an attractive option for entrepreneurs. Here are some of the top pros of building a family business:
Stronger Relationships
Family businesses tend to be built on strong personal relationships, which can translate to better communication, higher office morale, trust, and cooperation among team members.
Shared Values
Family members often share common values, which can translate into a strong sense of purpose and direction for the business.
Greater Control
As owners and managers of the business, family members have greater control over the decisions and direction of the company, allowing for greater flexibility and agility in responding to market fluctuations, design trends, and industry changes.
Enhanced Succession Planning
Family businesses can be well-positioned to ensure the long-term viability of the company through thoughtful succession planning, as younger family members are often groomed to take over leadership roles in the future.
Strong Sense of Pride & Ownership
Building and running a successful family business can be a source of pride and satisfaction for family members, who feel a strong sense of ownership and responsibility for the company’s success. This sense of pride will carry over into a drive for successful stewardship.
The Challenges of Independence
Of course, building a family business is not without its challenges, and it’s important to understand these as well in order to navigate the complexities of a family-run enterprise. These challenges often arise due to the unique dynamics that come into play when running a business with family members.
One of the biggest challenges is balancing family relationships with business decisions. In a family business, emotions can run high, making it difficult to make objective decisions that are in the best interest of the business.
When families work together, there is often overlap in roles and responsibilities, and it can be difficult to determine who is in charge of what. This can lead to confusion and tension within the business, making it difficult to operate efficiently.
And don’t forget! On top of managing your family, you’re running a business! With all of the risks and demands that involves, whether you’re working with family or not.
Andy Stern’s Tried & True Techniques
Starting a family business can be an exciting and fulfilling experience, but it is also a major undertaking. A strong and sustainable family business requires careful planning, hard work, and dedication from all family members involved. Here are some of the essential steps for building a successful family business we employ here at Andy Stern’s.
Develop a Clear Business Plan
A solid business plan outlines your goals, strategies, and financial projections. This helps you identify your strengths and weaknesses and set clear targets for growth.
Define Roles and Responsibilities
Clarify everyone’s roles and responsibilities, so everyone knows what they need to do to contribute to the success of the business. Make sure each family member understands their role, what they are accountable for, and how they will be evaluated.
Create a Governance Structure
Establish clear rules and procedures for making decisions, resolving disputes, and ensuring accountability. Consider hiring outside advisors or establishing an independent board of directors to help manage the business and provide unbiased guidance.
Foster Communication & Collaboration
Communication is key to a successful family business. Regular family meetings, open communication, and a commitment to collaboration will help build trust, respect, and cooperation. Consider using a workflow software for improved office communications, instead of mixing family texts with business needs.
Invest in Education & Training
Encourage ongoing education and training to keep everyone up-to-date on industry trends, new technologies, and best practices. This helps ensure that the family business remains competitive and innovative.
Develop a Succession Plan
Succession planning is critical to the long-term success of any family business. Ensure that the next generation is ready and able to take over when the time comes by providing them with the necessary training, experience, and mentorship.
Building a successful family business takes time, effort, and a commitment to excellence. By following these essential steps, you can create a strong and sustainable business that will benefit your family for generations to come.
