Advantages of a Family BusinessPosted by Erin Collins on Oct 10, 2017
A family business is a commercial venture in which family members are involved. A family business can include many different types of combinations, such as parents and children, husbands and wives, siblings, and multi-generation owned ventures. Most family businesses are operated directly by the owners, who are consistently involved with day-to-day operations. Alternatively, others hire non-related individuals to coordinate day-to-day operations while the actual owners have very little involvement.
Leading and working in a family business can bring valuable benefits compared with other business types. The long-standing history family members have with each other properly equips them to define each other’s strengths and weaknesses appropriately when operating a family business. Family members are more likely to accurately assign one another to suitable business roles, which provides for a competitive advantage over other variations of businesses where talent may not be correctly utilized and placed.
Benefits to running a family business:
- Commitment to success: families who are involved in running a family business together place more value on the success of the company. Family members are often the ones who have invested most of the time and money to get the business off the ground, so they are usually motivated to do what it takes to help the business survive and grow. Families also tend to be more willing to make sacrifices for the sake of the business, as opposed to working for or within a large corporation.
- Quality of product: family ownership is a tremendous asset when it comes to product quality. For most consumers, family ownership means that there is a dedicated family they can trust standing behind the product brand. A business that is family owned can fully capitalize by making sure they are perceived by the public in a specifically closely managed way. By doing so this gives friendly characteristics as opposed to a large company with no distinguishable personal characteristics within its running process. Also, when actively purchasing product from a family business, it is highly likely that a customer will, at one point, come face to face with the actual owner(s) of the business. Family business owners who are actively involved in the day-to-day processes are often known to make a point to have face-to-face meetings with the very individuals responsible for the successes – the consumers.
- Flexibility: family operations tend to be more lenient and forgiving when it comes to work schedules, work-related judgments and even mistakes. In family businesses, there may be more leeway to work a flexible schedule or create an appropriate work/life balance that effectively serves both personal and company needs.
- Employee relations: family-owned businesses generally take better care of their employees, as they are seen as extensions of their own family. More often than not, family businesses are significantly smaller than businesses in the corporate world, so there is less potential for employees to feel as though they are just another employee number on payroll. It is also important to note that happy employees are known to treat customers (existing and potential) better as compared to a continually disgruntled employee working for a large corporation.
- Speed: In a smaller, family-owned business, an idea can emerge in the morning and employees can begin implementing said idea by the afternoon in the very same day. Employees and business leaders have the capability to bypass the multiple hurdles and barriers that encompasses the corporate world. This not only allows family businesses to have quicker response times to customers, but also quickly react to any potential employee needs.
“Family values” are taking on a new meaning in today’s economy. If family members are able to recognize that value and work together for the common good, family can be the biggest competitive advantage in the workforce.