Posted on : 13th March 2023

How to Ensure the Success of Your Family Owned Business?

If you are starting a family business or are already in a family owned business, you would have realized by now the complications and the benefits it brings along. It might not even come to you as a wonder that only a small percentage of family businesses are able to make up to the next generation. So, how do you intend to safeguard your family owned business against the test of time? What measures do you intend to take up so that it becomes the legacy that is cherished for generations?

My experience so far . . .

S.K. Educations Pvt. Ltd. is not only the organization I founded under the guidance of my father, it is also the legacy that my family is committed to with full dedication. My children have also joined the family owned company, and I completely acknowledge the challenges and the opportunities this generation mix holds up for us.

What are the keys to make it through . . . 

Before understanding how a family owned company can attain new heights and last for generations, let’s go through some of the benefits that it carries. 

So, what are the benefits of a business run by the members of a family? 

• Since the family members are closely connected to the success of the family owned business, their commitment and passion come naturally in general 
• This access to human capital also proves beneficial for the business in emergency situations
• Family business management ensures stability in leadership and secures legacy

These are just some of the important benefits of starting a family business and sustaining it. There are, however, some disadvantages as well. For example: 

• It may become hard to keep the interactions specifically professional in the office setting and specifically familial in the home setting 
• Competence may take a back seat in important decisions
• Family business succession is also a significant concern 

These disadvantages are daunting, for sure. But here are some of the keys that I believe will help you make your family business stand the challenges and seize the opportunities:

• It is not that the leaders of your business should exclusively consist of your family members, i.e., family business management need not rest entirely on the shoulders of the family members (When the family employs a few leaders from outside their family contacts, it helps them gain a reality check and come up with a fresh perspective on things)
• You should refrain from hiring family members for the roles and responsibilities they are not suitable for (It creates unrest among the employees and also harms the progress of your organization)
• The roles, responsibilities, remuneration, etc. should be documented at the very beginning for everyone so as to make sure of the smooth functioning of business operations
• Encourage children to gain some experience outside the organization so that they are very well aware of things before joining the family business
• Have regular communication to avoid the conflicts that may be arising
• Family business succession should be discussed and planned well in advance

Such methods would help you make a success out of your family business. The earlier you are aware of the needs of your business, the better you will be able to address those needs and the better it will be for your family owned business. 

So, do you think you are ready for this journey which is no doubt going to be full of decision-making?

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