Family businesses can often have a reputation as having friendlier, more devoted employees—even though it may not feel like that when your family can’t agree on who’s on call that weekend. But this strong bond that ties a family to their business creates a sense of ownership and pride that may even span generations.
Family businesses should recognize the competitive advantage of this legacy when promoting their business. If you run a family business, you may be able to use some of the following benefits unique to multi-generational family companies to differentiate your business and maintain a significant competitive advantage.
Family loyalty: Family members in business may demonstrate a greater sense of loyalty to each other and to the business. Family members may also tend to be more committed to the success of the business and are more passionate about what the business stands for.
Legacy: Families in business have an opportunity to create a lasting legacy that can provide a sense of accomplishment and pride. Subsequent generations may be strongly motivated to build on the efforts of their forefathers and become stewards of the family business and carry it to new heights in the name of the family.
Access to labour: Multi-generational family businesses may have access to a labour pool of family members who may be more flexible in taking on different job functions and filling in for others — anything to help out and be part of the businesses.
Access to capital: Family businesses may be able to rely on the family as a source of capital for funding business activities. This could be a significant competitive advantage, especially when times are tough and funding is tight.
Key employees: Key employees from outside the family often appreciate and enjoy the unique work environment created by a family business. The workplace tends to be less formal, more hands on and more personable. Many key employees are sometimes like extended family and develop a strong bond with the family and the family business.
Patience: Family businesses may tend to be less driven by short-term financial results and are prepared to sacrifice short-term gains for the achievement of longer-term goals. This flexibility allows these businesses to align the deployment of resources with their strategic objectives.
Values: Family business owners have the opportunity to teach and pass along their business and personal values to the next generation. Family members can take pride in upholding these family values and build them into their day-to-day work and personal activities.
Career opportunities: Many family business owners pride themselves on being able to provide family members with career opportunities. The family business can be a great training ground for family members who aspire to pursue business careers elsewhere or within the family business.
Relationships: The opportunity to work with family members to pursue common business goals can be a very rewarding experience. Years of bonding among family members can create a strong sense of belonging and interdependency. Effectively managing these family values can go a long way in ensuring long-term family and business harmony.
Succession: As well as providing career opportunities, family businesses may also favour passing the business along to the next generation of family members. The opportunity to be an owner of the family business can be both motivating and rewarding.
Community and philanthropy: Many family businesses are also active in their communities – just think of your neighbourhood and the families that make it strong! Both the community and your family business can benefit from mutual support.
Family businesses that are able to take advantage of these unique attributes and leverage them into the business with the potential to grow value. That’s why planning succession in a family business is important – it can harness these benefits and secure success for many generations.