Most family-owned businesses tend to operate by the rule of thirds– only a third of them make it to the second generation, and only a third of the businesses in that group remain in business by the third generation, and so on.
If you are currently running a family business, considering joining your family’s business, or weighing the pros and cons of bringing your children into the fold, the following are some thoughts that you may want to consider, as you begin to think about what challenges you may encounter – and what opportunities could lay ahead.
- If you bring your children into a family business at a young age, you may have to walk a fine line between teaching them about hard work, working as a team and allowing them to pursue their own separate dreams.
- Older members of the family may not understand or value concepts such as market share, database marketing or social networking.
- Family members may have to play multiple roles, ranging from manual tasks like painting and repairs, to executive duties like negotiating partnerships or securing bank loans.
- While new family businesses may require flexible work roles at the beginning, eventually you will need to outline every person’s responsibilities, compensation level, long-range goals and line of command.
- Certain patterns of behavior or types of communication between family members, like one-upmanship or a tendency to correct someone’s grammar, may be played out in the business realm as well.
- Cross-generational entrepreneurs tend to pass on traditional values such as perseverance, a willingness to get your hands dirty and ways to build trusting relationships with customers and self-sacrifice.
- The choice of how much to grow your business is up to you. If you are in a family business because you enjoy the flexibility and camaraderie, you may want to keep your company small and local. If you’re in business for big profits, you may want to strive to take your business international or spin off subsidiaries.
- Family-owned businesses foster resiliency as they center around a close-knit management team, which has a vested emotional and financial interest in the company’s survival.
- Without pressure from shareholders, family-run businesses may be able to take more time to achieve profitability and take business risks without needing to justify decisions to others invested in the company.