Keeping it in the family: What makes for a successful family business?

Over the decades, servicing many successful family businesses, I have picked up valuable lessons on what attributes and values set them on the path to success. 

As the name suggests, a family business is a business that is actively owned, operated, and managed by two or more members of one family.

Here, members may be related by blood, marriage, or adoption. Different cultures may have other means to define this kind of business.

Below are some essential principles to hold true in a family-run business: 

Open and honest communication 

Within the family space, members have their ways of communicating that may work for you at home. But, this may not always be the best approach in the workspace, considering it another sphere of interaction.

Make open, regular communication a vital part of your business. Rather overshare than under-communicating. When you feel there are communication problems, confront and correct them immediately.

If you feel the need, it could be of assistance to bring in an outside consultant to implement structured communication methods or assist with any issues in the home that may creep into the workplace.

Embrace the change 

When it comes to the longevity of a business and the success that comes with it, changing with the times is essential for any business, especially multigenerational family businesses. Be dynamic, not stagnant. 

Avoid developing an aversion to new technology or resistance to changing the cultural norm. A family-run business must evolve or risk alienating both employees and customers.

Set Boundaries 

Leaders of flourishing family-owned businesses know that setting boundaries is critical to establishing and maintaining success. Institute and uphold a clear separation between family and business. In other words, keep family issues out of the boardroom and work at the office. 

Practice good Governance 

Following on from setting boundaries in a family business, good Governance should also be highly regarded. Having meetings and including advisors from outside the family is beneficial and enhances the business values.  

Recruit non-family members 

It is essential to recruit outside your family for staff and leadership positions. There is a world of talent out there. 

Successful family companies tap into this talent pool for skills and expertise family members don’t have. 

Don’t force reluctant Family members into the business 

A good family business doesn’t strong-arm or guilt relatives into joining. 

Make working for the company optional. Any company, family-run or otherwise, needs employees passionate about both the corporation and its role within it.

Allowing family members to come to the company on their terms leads to happier employees and better business. 

Succession planning  

One of the biggest challenges facing a family business is passing the baton from one generation to the next. The process of choosing a successor(s) should start years in advance of the actual cutover date.

It should be undoubtedly incorporated into the company’s strategic long-term plan. t=This is not an event but rather a process it could take as long as decades to reach fruition. Nevertheless, it would be best if you have a plan.

Here is an article from Mr Naidoo on the benefits of succession planning 

Over my years of dealing with successful family businesses, the signs of whether they will be successful or not are readily apparent at an early stage. 

The current leadership of the family business must take cognizance of what is required to be successful and work on implementing these good practices. 

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