Don Schwerzler has been studying and advising family business entrepreneurs since 1967. He is the founder of the Family Business Institute, based in Atlanta, Georgia, and organized one of the first college programs to help entrepreneurs who were interested in staring a family business. The Institute is a mentoring and consulting resource for family owned businesses. Here is some advice from Don to help you grow your family business.
Avoid Cookie Cutter Solutions
Don shares, "If there is any one lesson I have learned in working with many hundreds of family businesses, it is that every family business is unique and complex in its own way." Don't make the mistake of building your family business based on a standard approach to running a small business. Organize your family business around your values and your family identity. Your individual circumstances combined with your business idea and industry may lead you on a path that looks and feels different from what others are doing. "A strategy that works well for one family business will be a disaster for another family business," explains Don.
Share the Wealth
You want family members to have a stake in the growth of your family business. One way to ensure this is to give them shares or a percentage of the business ownership. Don explains, "Based on 40 years of working with family businesses, I would recommend that shares in the business only go to the kids who are working full time in the business." He doesn't suggest that you exclude family members who choose not to work in the business from any inheritance. He recommends other ways to transfer family wealth for those family members.
Leverage Outside Help
You will experience difficult moments when running your family business. Some families experience a total breakdown in communication, which often results in hurt feelings. A therapist may not be the best solution if the tension is based on daily activities of the business, because she may lack the business building experience. A family business advisor or team of advisors will have the business training and knowledge to help families improve their communication skills as well as offer solutions that address the sales or other business growth problems.
Bridge the Gap Between The Generations
You have to be aware of the way the generations in your family business view both problems and opportunities. Don has seen first-hand how feuds develop if families are not intentional about bridging the gap between the generations. For example, conflict can arise if the next generation has different ideas or strategies from the generation currently running the business. "Planning for the succession is crucial to the survivability of the family business," explains Don. His advice is that families should manage the succession process effectively and work to understand all of the individual points of view.
Make Your Family Your Priority
The mistake that some families make is to prioritize the business over the family. The day to day activities and struggles of the business drive some family members to operate in reactive mode. Don proposes a better way to handle the relationship between the family and the business. He says, "If a family business is going to create a mission statement for the business, we suggest they first develop a mission statement for the family. If they are going to develop a strategic plan for the business, first develop a strategic plan for the family." This empowers families to have a business that serves them, rather than the other way around.
Don't Ignore Problems
There are challenges associated with running any type of business. Problems are often compounded in family business because of the underlying family relationships. It's important to dedicate time to work on your relationship as well as the business. "Family business problems rarely go away by themselves. The longer the problems persist, the more destructive they become," explains Don. He advises families to tackle problems as they arise, so that they can work towards building successful relationships, rather than destroying them.
Don is a pioneer who has helped family businesses succeed while maintaining healthy relationships. He says, "Assisting a family business resolve and/or avoid the mistakes that can wreck the business and/or ruin the family relationships, makes all the work worthwhile."