For some people, business runs in the family; for others, it’s the family that runs the business. The concept of mom-and-pop stores has been around since time immemorial, many of which have gone on to become successful enterprises under the same family that founded them.
Now, how did these businesses triumph in the face of larger, more established competition? The secret lies in thorough generational organisation.
The magic of family entrepreneurship
Family businesses are an entirely different world from more meticulously organised companies and corporations. Members of the same family hold all the positions within the business organisation, as opposed to employees promoted by merit or people hired through a rigorous recruitment process.
Family-run businesses are often a prominent part of their community. They’re run by familiar faces in the neighbourhood and understand the needs of their audience better than their more formal peers. Plus, they tend to overdeliver and be spontaneously generous to their loyal patrons – after all, the family’s reputation hinges on that of their business.
Successful family businesses often outlive their founders and sometimes go on to become large corporations with the founding family at the helm. This multigenerational success goes beyond financial books; the secret lies in making sure that the family keeps the whole thing running.
Setting up a family business that lasts
It is important for founders to prepare their family business for transition, or it will die with their generation. Here’s how you can ensure a seamless familial succession in this case:
- Instil entrepreneurial values within the family. Involving family members in the business should be more than providing them with stable employment. You should make sure that they learn as much as they can about the trade and that their performance helps you identify the right people to take your place.
- Establish a reliable supply chain. As a family business founder, your job is to make sure everything is all set for your family’s next generation of entrepreneurs. As such, it helps that you have everything in place before succession, including a reliable logistics network that will keep your business running for as long as someone’s at the helm.
- Prepare potential successors for leadership. Promote enthusiastic, high-performing family members into managerial positions or let them take on more strategic roles. Be sure to be around to guide them until they are ready, preparing them to take on a leadership position later on.
- Appoint people to support a seamless succession. Identify people who can help your successor go through a seamless succession and eventually succeed even after you’ve retired. These can be long-time employees who know the ins and outs of your business and will be happy to guide the new boss.
- Always consider the feelings of other family members involved. Transitions to new management do not come without snags, and sometimes the opposition will come from within the family. As major stakeholders, it is important that you understand how they feel about your decisions and that everyone comes to an agreement before everything comes to fruition.
Conclusion
Each family business is a unique tapestry woven by familial bonds and community trust. Organising family businesses across generations can be a monumental task, but one that should be undertaken for the enterprise to succeed. Ultimately, family businesses endure not just for profit but for the preservation of a heritage and the impact they leave on their communities.