Family Business in Transition: Finding a Better Way Forward
A family-run business can really be the backbone and lifeblood of your family.
Generally, most small business owners find themselves so involved in the day-to-day operations that it can be hard to step back and consider long-term plans, and how the business might affect generations to come. But the reality is, a time will come when you want to retire and hopefully pass along the business to other members of your family, so it’s important to consider what’s next both for you personally, and how that decision will affect the rest of your family if you’d like to keep the business going.
This conversation, however, can come with its own set of complications. Often what one generation believes to be the best for the business may differ from what their children would like to see, so it’s a process to be worked through carefully and considerately. We’ve helped many businesses through this transition and have developed some top tips for how to grow or scale your family business successfully.
Prioritize what’s best for the business
As the current business owner, you should set your vision for the company. What are your goals, both personal and professional? Where do you see the company growing in the next 5, maybe 10 years? Think about how involved you want to be, and what your role might look like. It’s exciting to think about the future of your business and watching your family carry on its legacy for years to come. For multi-generational businesses, adapting to changes in the market is pivotal to their success. But often when new family members come in to manage, they’re inclined to make broad, sweeping changes, and that’s often not best for the business. You want to focus on what makes your business unique and special as it is today, and how you can enhance and grow those special characteristics long into the future.
Test it out
Once you’ve set a vision for your business’s future and have started to think about what your next big goals are, it’s time to test those out. Some business owners feel like they have to “go all in” with new ideas, while the opposite is true. Small, controlled changes can help you retain your customer base while testing out new services, products, or features that can help you reach those future goals. You may have a goal, for example, to increase your prices across the board, which is great! But with things like pricing especially, it’s wise to introduce increases slowly, because while growth cannot happen without increased profits, it also can’t happen if you lose customers because you scared them away with big price hikes. It’s best to communicate any price changes honestly and openly with customers, who will often understand the need for your business to evolve and grow. It can also be hugely beneficial to work with a financial expert on your pricing strategy to keep you on track.
Technology is another great tool to help you streamline and grow. Many family run businesses don’t utilize appropriate technology, which leaves much more room for human error, but also means that your processes are likely taking far more time and energy than they should. Using technology can free up time and automate tasks, and it can provide a level of accuracy that simply can’t be reached by running things manually. It can also help you uncover hidden costs within your business, which might help to save you even more money in the long-term.
The kinds of technology you might consider for your business could be a low-cost CRM for a service-based business, or maybe a physical card reader connected to your accounting software for a retail store. There are countless ways that implementing technology can help your business, but it’s always important to keep in mind how disparate software systems will interact and integrate with each other. This is another area where it can be helpful to bring in an expert who is well versed in making sure all pieces of technology work well together.
As outlined above, there may be areas within your business where you feel like you’re lacking appropriate resources or know-how. In these instances, it can be really helpful to bring in an expert to walk you through the things that you don’t know, and help you implement new technology or strategies to help you reach your longer-term business goals. A growth and profitability advisor can work with you to set those goals, develop a plan, implement that plan, and track results all along the way.