Especially given the financial realities we now face, family businesses are extremely important to the state of the overall economy. Many of the hugely successful businesses of the past were begun by families. The family business traditionally has been a hallmark of the American Dream.
According to Hubler Family Business Consultants, family-owned firms represent 95 percent of American businesses today and generate more than half of the annual GNP.
Today, great challenges are facing family businesses. Among them is the unprecedented competition, even in small areas, from larger operations. Add to this the ready availability of goods and services via the Internet, and you have two of the major forces threatening the family business startup, to say nothing of the uncertain state of the economy. However, the prophets assure us that the family business will continue to prosper. It has some great advantages that far outweigh the deficits.
First, the family business does not have to answer to the interests and the whims of multiple stockholders. Although family conflicts can be extreme, the pressures are generally more containable than stockholder conflict.
Secondly, the family-owned business is flexible, better able to respond realistically to internal and external problems.
Thirdly, the image that a family business can present is often one of stability and dependability. If the family is well-known in the area, the family reputation becomes the company reputation and vice-versa.
Finally, family members are capable of denying themselves early gains for later success. The nature of a family struggling together makes that possible. They can focus on the long-run success, rather than being judged by others on a short-term basis. Ironically, this is a trait we seem to be relearning from our growing pool of immigrants.
Hubler is one of several national companies dedicated to helping and nurturing the family enterprise. Hubler consultants advertise that they work for the best interests of the B.O.S.S., an acronym that means “Business, Others, Self and Stakeholders.” Hubler makes the point that only 70 percent of family businesses continue after the first generation, with only 23 percent making it to the third. Thus, succession planning is one of their more important services. Hubler can be found online at www.hublerfamilybusiness.com/.
Another helpful organization in this field is the Family Business Institute. The FBI offers guest speakers, direct consulting, help with strategic planning, financial analysis and a host of other services. Their stated goals, “more family harmony, less time and fewer headaches.” Family Business Institute can be accessed at: www.familybusinessinstitute.com.
A third source of help is the National Center for Family Business. This company offers online advice at FamBizAdvice.com. They are also the publishers of Family Business Journal, a useful little magazine for any member of the family enterprise. Their Web page claims to help family businesses in “radical ways.” They promise to talk with the stakeholders who are invested in the family enterprise to determine their dreams, wishes and desires. They interview spouses, key executives, family members who aren’t employed in the company and others who may be influential in business family affairs (such as the family’s CPA or attorney).
Perhaps the most important service any of these companies provide is the objectivity of an expert third party, something that is nearly always lacking in any family business startup.
Those of you who like to stay local will find a rich resource for family business consulting at the Central Oregon Community College Business Development Center (BDC). They offer confidential consulting and various workshops at a very low cost. You can contact the SBC at 541-383-7290.
Lowell H. Lamberton is a Professor of Business at Central Oregon Community College. You can contact him at email@example.com or by phone at 383-7714.