Guideposts for Success in a Family-Owned Business
Owning a family business can be one of the most rewarding experiences in life. The rewards are great when family members share a passion and work as a team to build that business. A family business can also be one of the worst experiences of your life and tear a family apart if you are not careful. Following are a few best practices that can help ensure that as you build a strong, successful family business, you also preserve those strong family relationships.
How in the world can a shoeshine kit and a piggy bank serve as guideposts for running a business? At the recent talk for the Florida Tech Visiting Entrepreneurs Program, Bob Keimer shared how these two old keepsakes provide him with direction in his entrepreneurial endeavors. Bob recounted a family story about his entrepreneurial dad who got his business start by shining shoes at the age of 8. His dad said the key to success was “the snap” of the shine cloth across the shoes. Every business, especially a small family business, needs to identify and promote “the snap” – that little something “extra” that sets the business apart from its competitors. “The snap” should be something that customers love and can’t find anywhere else.
Bob recalled another family story where his parents borrowed money from his old piggy bank when he was 10 years old. His dad was starting a business and needed every family resource to get it off the ground. For Bob that piggy bank symbolizes the benefits of taking a risk and bootstrapping to pursue new opportunities and realize your dreams. In today’s hyper-competitive business environment, family businesses need to take risks and develop creative, “bootstrap” methods that improve business efficiency while also delivering great products and services for their customers.
Steps to Success in a Family Business:
- Bootstrapping is just the norm. Avoid debt and always minimize expenses.
- Conserve cash.
- Recognize failure and act quickly. A failure means that you are one step closer to success.
- Have unshakeable self-confidence and optimism. This will get you through the tough times.
- Get everyone in the family involved – spouses, children, cousins, brothers and sisters. They are there and have amazing talent. Make use of it.
Major Challenges Unique to a Family Business:
- Separating business and family roles. You are with each other all the time. You must be able to be the CEO at work but at home just be dad or mom.
- 24/7 family obsession. Yes, the business needs constant attention to be successful but you also need time for yourself and family as well.
- Family members who fail to perform. You do not want to alienate or create conflict within the family, however, if you do not address poor performance the business will suffer.
- Managing growth. Letting go of the reigns can be difficult. You must trust in your family to take on some of the responsibilities as your business grows.
- Appreciating the special nature of a family business – people that you have grown up with being able to work as a team on a common goal.
How to Enhance your Experience in Running a Family Business:
- Appreciate all the fun times and dozens of memories.
- Planning is not a bad word. At some point the entrepreneur can no longer hold everything in his or her head. Continued success and successful growth requires some planning.
- Clearly define roles and responsibilities for family members. This allows family members an identity and an opportunity to make defined contributions.
- Require kids to spend time working outside the family business. This gives them a broader perspective and an opportunity to bring new skills and knowledge back to the family business.
- No one should hold a grudge. Disagreements will happen but bitterness should not be carried.
Being a part of a family-owned business can be quite a rewarding experience. It can teach us lessons to be passed on for generations to come.
Bob Keimer is the co-founder and EVP of Airgonomix, LLC and an adjunct instructor for the Nathan M. Bisk College of Business and Program Coordinator for the Entrepreneurial Training Services Program at Florida Institute of Technology. Donn Miller-Kermani, Ph.D. is the director, Women’s Business Center at Florida Tech as well as an adjunct instructor at Brevard Community College.