Benefits of a family-owned business.
Setting up a family business or looking to improve the management of your family firm? Let’s talk about the advantages and benefits that can be maximised in having a family-owned business, and note, with all advantages do come disadvantages!
Family businesses still thrive in today’s competitive economy. As most successful family businesses are not only well-founded but also well-run.
Knowing the following advantages of being in a family-owned and run firm can help business owners maximise each one of their family-owned businesses:
- Commitment and unified leadership
- Trust and authenticity
- Flexibility and versatility
- Vision and long-term goals
- Decrease costs and expenditures
- Next-generation ingenuity
Commitment and unified leadership
It is natural that all family members demonstrate and share a level of commitment to the firm since the core of any family business is a shared business vision and identity. That dedication is hard to find, much less replicate, in any other non-family business organisation. Because the family firm’s vision is as consistent as it is cohesive, it opens more opportunities for business development and the business’ continued success.
It also results in a more unified leadership and promotes solidarity in and among all the family members running the firm. This can be seen as a sense of loyalty is imbued down to the organisation’s other staff members and/or employees.
If there are disagreements between family members, a family-owned and run by business has the unique advantage of getting things done, resolving conflict, and moving towards realising a common goal without the burden of office politics.
Family-owned and -run businesses can achieve, maintain, and elevate a sense of business stability in its leadership and overall organisational structure and culture.
Family positions and seniority can determine and define the organisation’s leadership, making way for leadership longevity. Well-founded policies are delivered better if there is an overall stability to the organisation.
Trust and authenticity
Essential to all business organisations, trust is a unique and very evident in most successful family-owned and -run firms. Because trust is a given, with inherent trust among family members, the business’s leadership can talk, discuss, and disagree more openly and freely. As the business’s leadership employs a greater sense of trust, staff members/employees are allowed to enjoy a freer space for authenticity that can result in brilliant business ideas. When effectively harnessed, authenticity and the culture of trust can make way for professional growth and the firm’s overall development.
Flexibility and versatility
Most often, the firm’s leadership that is comprised of members of the same family or clan are willing to take on several different roles and workloads simultaneously to make sure the company succeeds.
Because of this flexibility and willingness to give more than what is expected, it drives continued success, enrichment and a better understanding of the industry. This includes the job or jobs that are to be done, the employees under the firm, the customers targeted, as well as the present reality and future endeavours of the whole organisation. This understanding can help family members formulate better ideas for the creation/development of products and services that the company offers to its customers/clientele.
Vision and long-term goals
Family-owned and run businesses place importance on hitting business goals and the overall company vision in a long-term period rather than a short-term period.
This long-term perspective, when properly moulded and intelligently utilised, allows for creative decision-making and strategy development. The pressure is not to come up with reports and strategies for investors every quarter. Rather the focus is to utilise resources to projects that are perceived to not only benefit the family-owned and -run company in the present all the way into the future.
Decrease costs and expenditures
Family members are willing to contribute their own financial resources when starting new sub-ventures for the business organisation or when there are financial difficulties. This decreases costs and expenditures while strengthening financial capability for the business. This desire to make sure long-term success is inherent as part-owners.
A family business can include the next generation of members in the business’ leadership and work- and knowledge-force, increasing competitive edge over other non-family firms and gaining access to their youth.
Family businesses have a convenient and fast transition of leadership within generations of the same family or clan. This convenience in transition could, in turn, maintain long-term business policies that are already in place or complete those goals successfully.
However, there are of course, challenges and disadvantages
Of course, advantages come with drawbacks! Prepare for the challenges that the business might have to face, such as:
- family conflict
- unstructured/undefined leadership
- challenges in succession
- nepotism and family-oriented authoritarian leadership
Taking into account the advantage of starting or running a family-owned or run firm, as these will enlighten and help demonstrate better management abilities in the continued success of the business.
Source: MyBusiness.com.au November 2021