We often hear a lot of families that choose to carry on their business legacy by keeping the business in the family for generations. Is this a good idea and is a benefit for the family? I’ve helped a lot of folks buy into a family-owned business over the years but most of the time, that’s what keeps it family-owned… It stays in the family. So what’s the secret to a family-owned business?
If the family members can get along, family-owned businesses do in your because of a commonly understood purpose. However, family-owned businesses that are three generations or more are becoming few and far between. So what’s the key if you want to maintain a family-owned business or consider investing in one?
Identify the impact.
Those that are investing in a family-owned business do so to strengthen the main purpose and indoor long term financial success. They must also identify and agree on what they want to provide to the community. For some businesses, the community aim is not as big as others and some feel that it satisfied and need when it first was created but that need may have changed over the years depending on the type of business. With the growing impact of social media, family-owned businesses may find additional purpose in inspiring social development to the products and services they provide. [Source]
Communication is key.
Communications throughout the life of the business between family members and business owners are crucial to the success and growth of the business. Clear communication means that family members are open about their own personal goals as well as common goals within the business. Tension naturally builds over the years and can be a part of many family conversations, especially those pertaining to business but it can also strengthen the purpose of a family-owned business. The conflict of new and innovative ways to serve customers and traditional core values can actually be a benefit to the future of the business.
The key to a long-standing family business that endures from generation to generation is one that values its origins and tradition and yet completely tries to reinvent itself with each new leader and new generation. There’s a great balance between the past and embracing the future that can establish a purpose and a lucrative business for years to come.
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