Family Business facts from Forbes:
FACT: Family businesses generate over 50% of the US Gross National Product (GNP)
FACT: Less than one-third of family businesses survive the transition from first to second generation ownership. Another 50% don’t survive the transition from second to third generation.
From Berkshire Hathaway and Wal-Mart to small stores everyone, about 90% of all U.S. businesses are family owned or controlled by a family. The biggest issue with many family businesses is that they get stuck doing things the same way they have operated for years even when the business out grows that structure. The founding generation holds on to the reins of leadership too long and won’t pass control to their children.
Many if not most family businesses do not have a list of core values, marketing strategy, three year plan or even a one year plan. In the book, Traction, Gino Wickman suggests eight questions.
1. What are your core values?
2. What is your core focus?
3. What is your 10-year target?
4. What is your marketing strategy?
5. What is your three-year picture?
6. What is your one-year plan?
7. What are your quarterly rocks?
8. What are your issues?
In his book, Patrick Lencioni, The Five Dysfunctions of a Team: A Leadership Fable writes “If you could get all the people in an organization rowing in the same direction, you could dominate any industry, in any market, against any competition, at any time.”
Many family businesses do not share, understand their core values, core focus or have a marketing strategy. Many family businesses are faced with only four choices: sell the business, merge the business, close the business or stay the same. Peter Drucker wrote, “The best way to predict the future is to create it.”
Family Businesses need to have a plan.