(Photo courtesy of socialmonsters.org)
What’s it like to be part of a family-owned business? The experience has its pluses and its downsides, but overall it must be a working business model as family businesses generate 60 percent of the country’s employment and 78 percent of all new job creation and…even more impressive the average life span of a family-owned business is 24 years.
However, only 40 percent of family-owned businesses survive to the second generation, 12 percent to the third and 3 percent to the fourth.
In the past five years the number of family businesses run by women have grown 37 percent. Family businesses comprise 80 to 90 percent of all business enterprises in North America. Numerous well-known national companies were started by families and 35 percent of Fortune 500 companies are now family companies. Think WalMart, L’Oréal, Cargill, Ford Motor Co., Fiat, Peugeot, Comcast, Norstrom and Koch Industries.
The all American dream: owning your own business. It’s not easy and if you mix it up with your loved ones you may create even more challenges — but the one thing you can count on is that you won’t be building the business alone. Together with family members (parents, siblings, aunts, uncles, children) you’ll work to develop a successful enterprise. Perhaps it can be passed on to generation after generation. One that can keep several family members living that great American dream.
But without a positive attitude you’ll be a front for trouble. Attitude is a really big deal in family businesses. When attitudes of family members are positive, open and supportive the family business has long-term potential. Without those ingredients your family business can be stressful and unnecessarily demanding.
Not many successful family firms stumble beyond the second generation of stewardship through just good fortune. The children of founders become interested in the firm for their own career because their parents have demonstrated the firm’s financial and social potential. But firms that are eventually operated by the founders’ grandchildren, great grandchildren and beyond typically possess a large dose of another key ingredient: carefully cultivated and nurtured intra-family communications.
Four key words seem to sum up the stories of the several businesses highlighted in this issue of CBN. Listening, adapting, communicating and attitude. Family member’s attitude can mean the difference between winning and losing. Every person in the business has a choice: You can choose to have positive attitude or you can choose to be negative. You can choose to listen to each other or you can choose to tune the other person out and take your own path.
In the typical family business there are a myriad of attitudes that can be modified to produce better equanimity and results. From experience I can tell you that founders typically have substantial pride in what they have accomplished. They often started on a shoestring, bet their assets on the success of the business and put in an enormous amount of effort to make their idea bear fruit. Their attitude will be key as to how future generations view the business.
Each family member will see the family business from a different perspective. Some will see it as financial security. Others will see it as a something to be avoided at any cost. The visionaries will view it as security, opportunity, power, legacy, even freedom. Working together can solidify a family, but with inflamed attitudes, can dissolve it.
Successful family owned business deal with issues, not personalities, in which everyone has a legitimate say, and every person is treated with complete respect. With care and adjustment, sensitivity and encouragement, attitude enhancement can become a simple but powerful tool in family firm management.
Statistics indicate that most companies in the world are in some form, family-owned. This tells us that they’ve got attitude and fortitude to make it all work. The age of instant communication through the internet allows couples to raise their kids while working from home. It has allowed people to work together for a common goal and do it in a shared manner that establishes the groundwork for a successful family-owned business.
In the successful family firm, it is often the founders’ values and their evolution that form the foundation of the family attitudes regarding communications. The founders’ attitudes toward hard work, responsibility, power, communications, expectations, products, customers and vendors, set the stage for succeeding generations.
Here’s to continued growth and profitability for Central Oregon’s many and varied family-owned businesses.
