Did you know that more than two-thirds of the companies in the world are family-owned? This demonstrates that not only is it possible to manage a family business but that family businesses play a huge role in the global economy. However, family-owned companies are unlike other companies. In addition to the difficulties that accompany running a business, family-owned businesses have an extra layer of complexity. The main challenge is trying to separate personal and work relationships, which are heightened by the fact that you are family. All in all, here are secrets that we can learn from family businesses:
With competition becoming cutthroat by the day, it’s easy to be caught up in every trend that rocks the industry in a bid to be cutting edge. On the other hand, family businesses tend to be minimalists when running their business. They are cautious about where they invest their money by considering whether the investment will add any value to the company in the future. This explains why family businesses are less likely to have layoffs when recessions hit or lose money because they made additional acquisitions. However, this practice also means that these businesses are less likely to make much money when economic times are good.
Little priority on profit maximization
Family businesses are quite optimistic and believe that they will be there for a long time, and so their business strategy is a little defensive. Like the aforementioned, family businesses are skeptical of trends and rarely board trend bandwagons. However, just because these businesses don’t place their effort on maximizing profits shouldn’t imply that they don’t make profits. Their focus is mostly on their product, the employees, customers, and this pays off in higher profit later on.
Laid down lines that prevent conflicts
One major challenge of family-owned businesses is that they face a higher risk of conflicts because of the marriage between personal and professional worlds. There should be established clearly defined roles for each family member to avoid these conflicts. For example, conversations about work are highly discouraged when having family gatherings. Business matters are for the office.
As you strive in your business, you could try and borrow a leaf from the family businesses’ book. Are you struggling with management? These businesses are a rich source of lessons on this. You don’t need to adopt their business model, but there is no doubt that there is much to learn from these businesses.