Make Your Family Business Stand the Test of Time

Multigenerational small businesses survive and thrive when owners recall their rich origin story and treat each other with respect

Make Your Family Business Stand the Test of Time

Mitzi Perdue

You may be familiar with the statistic that 70 percent of family businesses — such as many septic service companies — don’t make it to the second generation. The big question is how can you beat these odds?  

Family members who work for your pumping enterprise need to learn some basic cultural attitudes. They need to know that they’re part of something bigger than themselves. They need to know they can’t always be right. They need to learn that being a member of a family business sometimes requires sacrifice.  

The biggest reason that business families fall apart is that the family hasn’t developed the kind of culture that supports preservation of the businesses they love. Families that leave this to chance rarely make it to the next generation.

So, how do you create this kind of culture?     

1. Know your family stories. We are the stories we tell ourselves, and high-functioning families have heard their family stories over and over again. How much does your extended family know about where the family business came from and what made it what it is today? How much do they understand the sacrifices, efforts and tenacity that went into making the family business? Do they know stories about family members putting the good of the family ahead of their own interests? Be intentional about telling these stories. The more stories and legends that are told, the stronger your family’s culture and the more likely your family business is to endure.

2. Take family vacations. Your family vacation could include five people or 100, but whether it’s a large group or a small one, having aunts and uncles and cousins spending time together greatly increases the chances of building a family business that lasts. A vacation means time set aside to share experiences and to get to know and appreciate each other and to embed the family’s values. It’s a time for all branches and all generations to build the shared stories and memories that lead to trust and caring. This is especially important if family members are geographically dispersed because it allows extended members to get to know each other.

3. Subsidize a family vacation after you’re gone. All too often when the patriarch or matriarch passes on, family members stop seeing each other. Maybe for the first few years they’re together at major holidays, such as Thanksgiving. And later on, maybe they get together for weddings. But gradually, there’s nothing left and family members have superficial relationships — or no relationship at all. A highly effective antidote to this is leaving money in your will to pay for an annual get-together. Some families subsidize a dinner, while others pay for a nice vacation. Either way, having an endowed yearly meal or vacation can keep families together. Ideally, there’s even money budgeted for babysitters and child-friendly activities.

4. Write a family newsletter. In a geographically dispersed family, a newsletter can play a huge role in helping the family maintain a strong and vibrant culture. Include in it interviews with the older family members or employees about the early days and some of the company’s struggles. The newsletter can help people catch up on family news — maybe someone became an Eagle Scout, got into the college of his or her choice or got a work promotion. It’s also excellent for recording weddings, births or, in the case of an engaged couple, telling the story of how they met. Other topics may include what’s going on in the company, including company milestones. Make it short, ideally no longer than one or two pages. You want people to read it, and unfortunately, there’s an inverse connection between how long it is and how many people will read it.

5. Get help if you need it. Fortunately, there’s a whole new ecosystem of family advisors who can help. There’s no such thing as a family business that doesn’t have conflict, and when there’s a serious family conflict, the pain from it can permeate every hour of every day. Not to mention that it can blow up the whole family, and with it the family business. So just as you’d get medical help if you had alarming chest pains, don’t put off getting professional help if a conflict in the family is getting out of hand. If you Google “family business advisors” you’ll get more than 45,000 hits in half of a second. Or if you have a financial advisor, he or she is likely to be able to refer you to a professional trained in family business relationships.

GET TO WORK

Family harmony is so important that anything you can do to nurture it is a wise investment. Many families — and therefore family businesses like yours — don’t stay together over the generations. This is likely to happen when a family leaves its culture to chance. The good news is you can take steps to ensure a close-knit family, and even better, the implementation can be enjoyable and fulfilling? 

Mitzi Perdue is a speaker, family-business owner and author of How to Make Your Family Business Last. For more information visit www.mitzi perdue.com.



Discussion

Comments on this site are submitted by users and are not endorsed by nor do they reflect the views or opinions of COLE Publishing, Inc. Comments are moderated before being posted.