Challenges And Opportunities As The Family And Business Grow Together
By Kyle Danner - April 04, 2019
Families and businesses go through stages of development just like every living thing. It’s more complicated when families are in business together.
As your business grows, you will face new challenges together. Shifts in leadership. Changing roles. A new company direction. It's easy to get blindsided by these problems, particularly if you're wrapped up in checking off your task list. Being aware of the challenges you face in every stage of business growth can help ease the stress.
To help you prepare for what's ahead, here are the three main stages of growing businesses and some obstacles you may face during each.
Whether it’s the desire to be their own boss or an opportunity that cannot be ignored, mom and/or dad decide to start a business.
Family Challenge: Losing the family in the business
It’s understandable that family can take a backseat given the focus on simply trying to keep the business afloat. Talk of the business may dominate the dinner table and family vacations may be postponed. The business may even become the babysitter with children spending time there after school or during summer vacation.
Business Challenge: Keeping the doors open
Despite the best planning and funding, starting a business is a daunting adventure. Since resources are often scarce, owners find themselves multitasking with marketing, finance, management, production and sales. Long term needs like strategic planning or staff development may suffer to meet more immediate demands.
Mom and dad’s hard work paid off and they transition the business to their children. It’s now time for the parents step down and for the kids to step up.
Family Challenge: Changing roles
Whatever the combination of brothers and sisters, and whether or not they decide to join the business, roles are shifting. Little brother may be the CEO and the oldest sister may pursue a career elsewhere. Plus, the kids are starting their own families. Finally, mom and dad are aging and may require additional care.
Business Challenge: Professionalization of the enterprise
Entrepreneurship is alluring because structure is loose and decision-making is streamlined. That may work when the enterprise is small but can turn into a nightmare as the company grows. At this stage, policies and procedures are essential. This includes hiring experienced managers and establishing corporate governance.
Extended Family Generation
Just like their parents, it’s sisters and brothers, aunts and uncles turn to step aside and make way for the third generation.
Family Challenge: More hands on deck
Family is more complex with in-laws and blended families. There are more homes to visit during the holidays and more birthdays to celebrate. Coordinating family life demands more energy and communication.
Business Challenge: Who’s in charge?
Without a clear plan for entering the business or choosing leadership, conflict can derail the previous generation’s efforts causing the business to stagnate and family wealth to diminish.
Challenges = Opportunities
The family and business challenges shared may seem overwhelming. The good news is that tremendous opportunity to strengthen the family and grow the business exists. Think about the stage your family and business are in currently. Do they match the challenges above or are you experiencing something different?
Whether you're the parent in the Founder Generation, the siblings preparing to take on the business on their own, or someone in an extended family business who doesn't know where their place is, setting a clear path for your future is the best way to ensure you stay on course despite the challenges you may face. And my free guide can help you do just that. Download your copy below and find out how to prepare for your future!