Being part of a family business is a common thing. According to the Conway Center for Family Business, just in the United States, these companies are responsible for 62% of the country’s employment and 64% of gross domestic product. And the same goes for companies around the world in an average or higher market share.
But don’t be mistaken, a family business is not necessarily a small or medium company. Walmart or even the bread moguls Bimbo are family-controlled. These companies are an example of what happens when you take your family-owned business to the next corporate level.
In order to do so, you have to be patient, resilient, and work hard on the institutionalization process. To take a company to the next level, you’ll need the best allies by your side. Camino Financial, a fintech company focused on helping small businesses get a business loan through a fully online process.
How do you know you are ready?
The first thing you need to know is that there is no law that says that your children will be interested in your company. And even if they are, they might not be the best fit for running it. This is perfectly normal and acceptable, even healthy.
A PwC survey shows that just 18% of family businesses say they have a robust
succession plan and that means that everything is in the hands of the founder.
Even though it’s hard, you and your family need to take a moment, step back and see the bigger picture: do you want to keep a small family-owned business or do you want to make it bigger, better, faster, and super profitable?
These are a few moments when you should consider taking the next step:
Bigger and unmet demand
If you are good at what you do, it’ll come a time when your clients will require something from you that you can’t meet. It doesn’t matter if your company provides products or services, the day has 24 hours and the human body has limitations. Would you like to have four arms at times?
But, since you can’t do that, you might want to start thinking about hiring a few sets of hands. Experts that can comply with your needs and turn things around so you can meet your client’s needs.
Unless you started a tech company and you are an expert on what you do, you’ll need to bring outside help to keep a modern, fast and lean operation. And this can come in the shape of a TI team, infrastructure technology, or collaborative and smart platforms. Can you imagine yourself telling a partner that you can’t upload an invoice to his platform?
You don’t know it all and that is fine, but there are other people, specialized and as hard-working as you are, that can help you explore, grow and become a state of the art company, even if you cut glass for a living. A small business loan can help you get there so explore that and choose one that can help you achieve your goals.
When you realized that you don’t know it all
Don’t let yourself get surpassed, because even though your experience is important, times change, things change and process too. 47% of family businesses plan to bring in outside expertise to help run the company according to PwC and this makes them truly stand out.
Plan ahead, take your time to explore, read resumes, and write down a profile for the best person you could think of to run your company. Then interview them and take a well-thought decision. Don’t rush, but start the process in time.
To become an international company
The dream! To have your brand on all the continents, in everyone’s mind. This doesn’t come cheap and it doesn’t happen out of the blue. You’ll need to make strategic alliances and that means time and money. But not only that. It means operation manuals and this means that every member of your company knows what they do and how to teach someone else to do it.
Sounds easy? Ask your family to teach a child to do their work and you’ll see how hard it is. Maybe you are the best at what you do but that can be shared overseas with someone who doesn’t know your company as you do. So, in order for them to do what you do, you’ll need to sit down and dissect every single process and write it down. Some family business hires external consultants to help them create these manuals.
The most important thing you need to take into account is to take steps into an institutionalized company, with a board of directors, specific profiles for each position, and a straight forward strategy that can be taught. This doesn’t mean that you are not going to hire a family, but it’s always better to have a second and even third generation of committed family members rather than imposed positions.
Think of it this way, you’ll be getting your family business ready for sale even if you are not even considering it. With a ship-shaped company, you can go miles faster and bigger than a day to day operation model. And if you don’t have the means to do it right now, consider small business loans as a tool to help you get there and an investment to be absolutely sure that you are going in the right direction. A little order never hurt anyone, right?