Roots: Best Practices to Run a Successful Family Business
ROOTS: Anchoring Your Business Course
A family business, as defined by the Harvard Business School, is when two or more related people own, lead or make major decisions for the business. However, the Entrepreneur & Family Business Council sees things differently. From our viewpoint, your employees, partners and investors in one way or another are family.
Family businesses are complex and tricky, especially when it comes to generational transitions. The odds aren't normally in the businesses' favor when it comes to surviving those transitions. 30% of family businesses last into the 2nd generation, while only 10-15% last into the 3rd generation.
Roots: Anchoring Your Business, is a course focused on avoiding all of the factors that can cause family businesses to fail and provide 12 best practices to keep your family and business functioning homogeneously.
A Glimpse of 12 Best Practices
- Foster a family culture of healthy communication and conflict resolution.
- 60% of family businesses fail due to lack of communication and trust*
- Hurt feelings and over-inflated egos can ruin a family business. Having unbiased, open discussions will create a level playing field for all, while also helping to mediate conflicts.
- 25% fail due to inadequate preparation of the next generation*
- The next generation can't succeed without a plan. Collaborate when making a plan for transitions and set time-oriented goals that hold all parties accountable. Having clear-cut expectations for all levels of the business will help the business function more effectively.
- Make Good Arrangements
- 10% fail due to lack of vision/mission*
- Honor your commitments that were decided during the planning process. Maintaining accountability will build trust and unity for the mission of the business between all levels of the company.
*70% of intergenerational wealth transfers fail, Roy Williams and Vic Preisser, Institute for Preparing Heirs, 2003, pp. 35-50
For more information on Roots: Anchoring Your Business, please contact Judy Hogel at firstname.lastname@example.org.