Starting your own business is scary. You have an entrepreneurial spirit, take a leap of faith and cross your fingers that it works out. When considering a multi-generational family business, this fear is magnified and with good reason.
In Canada on average, between the years 2010 and 2015, there were 95,000 new businesses created. Of those, typically only 70% would have survived past five years. Combine this with the fact that only 12% of family businesses survive to the third generation.
So how do you ensure success?
1. Know your customers needs and wants
It sounds simple. You have a product and/or service. Your customers have need of the product/service. But why do they call you? What sets you apart from the dozens of other companies that offer the same product/service?
Establishing the reason for repeat business is critical to ensuring that customers continue to return. It is critical to take the time to hear what your customers are saying – or more importantly not saying. In these digital days obtaining information on what is being said about your company is fairly easy. Ensure you take time regularly to reflect and hear (or read) what your customers are saying.
2. Treat every employee as if they are the most important employee
It’s easy to get caught up in the day to day of running a business, and the stressors that go with it. The thing is though – no one else knows about that, and no one else really cares. They only want to know what affects them, and rightfully so – they have their own stressors in life.
It comes down to feeling appreciated, and recognized.
Taking the time to learn all of your employees names means a lot – you know who they are, you are paying attention. Employee appreciation and the ability for employees to communicate their concerns or desires go along way to building trust – thus assuring employees that the junior generation is committed to the company’s best interest.
3. Work hard. Then work harder.
Often, while the senior generation was successful in business, there are only so many hours in the day – and the junior generation was spoiled to ensure happiness and peace in the family home. Regardless if this is the truth for you, the perception is that next generations are handed the business – a perfect gem that they can only ruin.
You must show that you are willing to put in the time and the elbow grease required to keep the company successful. Long hours, an open mind, and willingness to do the grunt work – it will earn you the respect of your employees and the trust that they can count on you in the hard times.
4. Don’t have too many cooks in the kitchen!
By the time family businesses succeed to the second and third generation there is the potential for multiple family members to be ‘in the business’. They are the senior generations unconscious attempt to ensure that one of them wants the business – comparable to an heir and a spare within a monarchy.
Ideally, there is one family member in charge – all others report to that individual. At times having one family member in charge of a department can work. Either way, hard conversations early on laying out clear guidelines – legally – are paramount to keeping the company successful and the family peaceful.
As businesses move from one generation to another it is important to ensure that these successions are executed because they are the right move for the company and the family. In family business there is no distinguishing between the two.