Tips for Building and Sustaining a Flourishing Family Business

According to research, family businesses account for 78 percent of new jobs created in the US market, and account for 64 percent of the U.S. GDP. Family businesses play an essential role in world economies by creating employment, producing goods and offering services that keep the world running. 

Some of the top companies in the world, such as Michelin Tyres, Ford, and Walmart, started as family businesses.

What is a family business?

A family business is an enterprise where family members actively participate in running the company and hold leadership positions.

Although the business may hire non-family members to run things, it is considered the sole property of family members and is often passed onto future generations.

According to Forbes, only 30 percent of family businesses continue to run to the second generation. 

Therefore, building a flourishing family business that will benefit successive generations and significantly impact the community around you, requires a lot of discipline and focus.

Here are 10 tips for building and sustaining a flourishing family business.

1. Avoid business debt from the start 

While getting a loan to start or run a family business may make it easy for you to get your enterprise off the ground and keep it afloat, it will lower your operational efficiency and stagnate your growth. Debt also puts you at risk of losing your business assets to creditors.

Therefore, you must focus on starting your business through debt-free options, such as life savings and money from family and friends, to avoid issues associated with start-up debt. 

Also, ensure you keep clear accounts when running the business and use its earnings to sustain its growth without falling into the trap of incurring heavy debt to get working capital.

2. Take calculated risks

One of the major advantages of running a family business is that you have control over how you run it. However, this may give you the freedom to take risks that could jeopardize your business.

Therefore, it is essential to consult other family members when making decisions to avoid taking unnecessary risks. 

Also, seek the advice of business-savvy people in the community who will guide you on building and sustaining your business by informing you of profitable business strategies to implement in your enterprise.

3. Choose good governance

You must customize solutions to your family business’s unique challenges. This will help you navigate governance issues, manage your wealth wisely, and foster healthy business growth.

Have a supervisory board made up of non-family business members to monitor how you run the business.

These are people who will monitor the entire range of activities in the family business, including sustainability initiatives, philanthropy, and community social responsibility (CSR), which are the foundation of thriving community businesses.

4. Hire professionals

Recruit skilled professionals from outside the family who are passionate about your company values for leadership and staff positions, such as in the board of directors and supervisory board. 

Their expertise and knowledge will ensure your business remains competitive in the market because they will provide an objective perspective of things and offer impartial oversight during challenging times.

For example, you may seek the services of Peppermonkey Media Marketing Firm if you need help marketing your company’s products or services.

Also, hone in on talent from employees outside and within the family and nurture it through education and mentorship programs in business administration as an investment in the future of the business. 

Image by Nattanan Kanchanaprat from Pixabay