{"id":7561,"date":"2019-06-09T07:59:35","date_gmt":"2019-06-09T11:59:35","guid":{"rendered":"https:\/\/kerryhannon.com\/?p=7561"},"modified":"2019-06-09T08:00:25","modified_gmt":"2019-06-09T12:00:25","slug":"5-ways-to-grow-your-family-business","status":"publish","type":"post","link":"https:\/\/kerryhannon.com\/?p=7561","title":{"rendered":"5 Ways To Grow Your Family Business"},"content":{"rendered":"\n

<\/a><\/p>\n\n\n\n

Taking a family business to next level can be trickier than it is for other small businesses.<\/p>\n\n\n\n

It\u2019s never a cakewalk to invest and take the inherent risk necessary to expand a business, of course, by hiring the next employee, adding a new product or service, opening a second location or borrowing to finance new equipment. But when a family is involved, things can get prickly for a variety of reasons \u2014many of them having nothing to do with the business case for expansion.<\/p>\n\n\n\n

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<\/a>Kimberly\nEddleston<\/p>\n\n\n\n

For advice on how to grow your family business,<\/a> I turned to two experts:Kimberly A. Eddleston<\/strong><\/a>,\na professor of entrepreneurship and innovation at Northeastern University and a\nsenior editor on the EIX Editorial Board<\/a> of the Schulze School\nof Entrepreneurship at the University of St. Thomas in Minneapolis (full\ndisclosure: The Schulze Foundation is a funder of Next Avenue) and Ken\nWentworth<\/strong><\/a>,<\/strong> a small business growth consultant based\nin Columbus, Ohio.<\/p>\n\n\n\n

Family Business\nGrowth Is Strong<\/strong><\/p>\n\n\n\n

Read on Forbes<\/strong><\/a><\/p>\n\n\n\n

This seems to be a great time to think about it. Family-owned businesses are growing faster and creating more jobs than their peers, according to the EY Growth Barometer 2018 survey<\/a>.<\/p>\n\n\n\n

\u201cThere are both pros and cons of\nbeing a family firm when facing a big growth decision,\u201d says Eddleston. \u201cThe\npros are the ability of the family to sacrifice for the firm \u2014 putting in extra\nhours and energy without taking pay, giving the firm generous loans with little\nor no interest, and often very lenient payback schedules and basically doing whatever\nit takes to make the firm succeed.\u201d<\/p>\n\n\n\n

Then there are the less tangible\nbenefits of being in a family business poised to grow. \u201cFamily members also\noffer emotional support, which often comes in handy when facing the turbulence\nand risk of growth,\u201d Eddleston says. \u201cFinally, a family firm is also able to\nmake quick decisions \u2014 quicker than non-family firms \u2014 because of the\nhigh-trust environment, which can be a real advantage when looking to grow.\u201d<\/p>\n\n\n\n

The Advantage of\nBeing Nimble<\/strong><\/p>\n\n\n\n

The EY survey supports her analysis.\nBecause growth decisions at family businesses tend to be made with the\ninvolvement of fewer people than at other firms, they can be fast and rely more\non gut than data, according to the survey. \u201cWe see family businesses using the\nadvantages of greater agility and streamlined decision-making to move faster\nthan their non-family business peers.\u201d wrote Marnix van Rij, EY global family\nbusiness leader, in the EW report.<\/p>\n\n\n\n

But there are also stumbling blocks\nto growth that are unique to family businesses.<\/p>\n\n\n\n

For older firms, there\u2019s \u201cthe\nproblem with legacy,<\/a>\u201d Eddleston explains. \u201cThat is, the\nfamily firm becomes mired in tradition and does not want to change things\nbecause they feel it would be disloyal to the founder\u2019s vision.\u201d<\/p>\n\n\n\n

For older firms, there\u2019s \u201cthe problem with legacy,<\/a>\u201d Eddleston explains. \u201cThat is, the family firm becomes mired in tradition and does not want to change things because they feel it would be disloyal to the founder\u2019s vision.\u201d<\/p><\/blockquote>\n\n\n\n

And family firms, especially small\nones, have a \u201ctendency to rely on informality,\u201d she says. \u201cThey often fear\n\u2018formality\u2019 and thus resist hiring non-family employees or growing because they\nthink it will change their culture and how they function.\u201d<\/p>\n\n\n\n

Finally, there\u2019s the fear of losing\na grip on the inner workings of the business itself. Says Eddleston: \u201cFamilies\noften like to call all of the shots, so if growth means they will need to hire\nand rely on non-family members, that can keep them from growing.\u201d<\/p>\n\n\n\n

5 Tips to Grow a\nFamily Business<\/strong><\/p>\n\n\n\n

Now that you\u2019ve seen the benefits\nand obstacles to growing a family business, here are five tips on how to do it:<\/p>\n\n\n\n

Build purposely. <\/strong>\u201cBefore\nexpansion plans can be executed, you need to ensure your current operations are\nin good working order,\u201d says Wentworth. \u201cFailing to heed that guidance can be\ndisastrous.\u201d<\/p>\n\n\n\n

Each step you take as you grow needs\nto be part of a process. A solid, functioning business with a foundation in\nplace is vital to preserve the essence and vision of the founder and the\nfamily\u2019s mission.<\/p>\n\n\n\n

Talk about it. <\/strong>When\nthere\u2019s more than one family member on the management team dealing with growth,\nit\u2019s imperative that everyone is on board with the planned changes. Communicate\nclearly about what you\u2019re doing, why you\u2019re committed to growth and why it\u2019s\nimportant to the long-term success of the business.<\/p>\n\n\n\n

\u201cTaking a family business to the\nnext level is often more difficult because there are more emotions involved,\u201d\nWentworth says. \u201cThe key element to thwart these challenges is transparent communication<\/a>.\u201d<\/p>\n\n\n\n

Stay focused on your family\u2019s values\nand the company\u2019s values. <\/strong>The transformation that comes from\ngrowth can be unsettling for your customers who are drawn to the personal touch\nof your family business. Keep them abreast of what\u2019s afoot and assure them that\nthey aren\u2019t going to lose that level of familiarity and comfort they trust and\nrely on.<\/p>\n\n\n\n

Hire with care. <\/strong>Adding\nemployees often goes hand-in-hand with ramping up your business. But to make\nthis click, the newcomers must not only be able to do the job, they have to\nbelieve in the values and mission of the business.<\/p>\n\n\n\n

Keep learning<\/strong>. To grow wisely, stay up to speed with your industry, economic trends and technology changes. Push yourself to attend workshops and seminars; take online courses. Doing so will help you be prepared to smoothly manage the growth you\u2019re looking for.<\/p>\n\n\n\n