About 5.5 million family-owned businesses operate in the United States, according to Family Enterprise USA. The secret to their success? It just might be the family aspect that makes these organizations thrive.
The business world knows that if you take care of the customer, the bottom line will take care of itself. Family-run businesses take it a step further, if you take care of your employees and treat them like family, they will take care of your customer and treat them like family. The business will thrive with loyal patrons and employees and continue to grow and be profitable even during tough times.
What truly drives many family businesses is the sense of connection and identity the owners and their family members feel with the business.
In family businesses, the founder and employees have an incredible passion for the business, a focus and energy that you’ll never find in a non-family employee. They’re so focused on the business’ success that it’s part of their identity. The business isn’t the life of non-family employees. In general, they won’t identify themselves with the business being part of who they are the way family members do. Non-family businesses can learn a valuable lesson from this family business attitude.
The core values of a family-run business are based on the core values of family life. Every member of a family is there for the other members in their time of need, no matter how big or small that need is. A non-family business can benefit from applying family values to their operations by creating a culture that has people wanting to work harder for them because they feel like family not a number.
A family business attitude makes all employees feel like part of the business. You watch out for each other and make sure all customers are treated the same every day, every time, by everyone. Like family. A dad expected more from a family than the employees because they had to lead by example and being more than just an employee working a job. Family is expected to do more and be better. That behavior flows into all employees and helps meet daily goals.
Despite the strong company culture typically found in family businesses, not all of them succeed: Thirty percent of family-owned businesses are passed down to the next generation, and only 12 percent remain viable into the third generation. A recent TAB survey found that lack of succession planning is one common reason that family businesses fail to stay within the family. Twenty-nine percent of business owners do not have a succession plan. Without one, it’s easy to understand how owners of family businesses can lose the legacy they’ve worked so hard to build.
Family business succession also faces the issue of a lack of training. Although 45 percent of owners say their children are involved in their business, 62 percent say it’s unlikely their business will remain family owned when they sell or retire.
A lack of confidence in leadership abilities could account for this gap. Training family members early and thoroughly can go a long way in building that necessary confidence. The perceived special treatment of related employees and the mixing of family and work issues can also cause points of contention in a family business setting. To ensure the success of any family members hired, family business owners should operate with a certain level of objectivity. If you bring a family member into the business, get them to work outside the company first. Make him or her learn how to take direction from others, so the family dynamic is neutralized. If spouses work together, make sure your roles are separate. Don’t discuss family matters at work or work matters at home.
