Through a special arrangement, presented here for discussion is a summary of an article from Convenience Store Decisions magazine.
According to the Small Business Administration, family businesses comprise 90 percent of all business enterprises in North America and 62 percent of the U.S. employment. Yet, only a third make it to the second generation, 12 percent to the third generation and three percent are a fourth-generation entity.
These are surprising figures when you consider that many c-store operators are run by second, third and even fourth-generation operators.
Baruch College professor Elisa Balabram, an expert in family business management, recently offered me five key tips for running a successful family-owned business:
1. Deal with daily pressure. It is imperative that family members of a business communicate well with each other. Create family rituals that allow for bonding, including dinners and vacations, where business discussions are not allowed. Hire a mediator to help mend relationships.
2. Understand and define roles. It is common for family members to occupy multiple positions without a defined job title. This can create conflict as there isn't a clear leadership role, and no one knows who is responsible for specific tasks.
3. Write a family constitution. The more family members involved the better, as it will give people a sense of ownership. Items to include are: mission and vision statements; dividends and benefits policy; and succession planning strategies.
4. Hire employees that are not family members. Non-family employees, either as employees or on the board, can share their expertise and serve as non-biased supervisors and mentors to the next generation.
5. Empower the next generation. Give the next generation a chance to work part-time. Pay them market value, but also hold them accountable to perform their jobs well. Allow them to work elsewhere to gain experience and new perspectives. If they join the business, make sure to mentor and empower them so they are ready to take the leadership role when the time comes.