Many families are beginning to question exactly how to best bless the next generation. Is the wisest decision to put people, systems and structures in place today that increase the chances of the next generation’s long term success? Will future profits be enough to successfully support ever-increasing numbers of family members? Is diversification needed to reduce financial risk? Are infrastructures strong enough for the growth needed?
Just a few weeks ago I had a family sitting in my conference room with this dilemma. The dad, a second generation owner, had taken a small operation and exploded it into a mixed company of wholesale and retail operations. Some of the stores were great, some not-so-great. There was quite a bit of debt to juggle. His children had all come into the business, and he was seeing their stress. One was in charge of payables, and each day she had to juggle funds to meet the supplier and bank obligations. While the whole family loved the business, they were all asking themselves, is this the right business to leave the next generation?
With added pressures of the credit crunch, slowing receivables and possibly looming bad debt, you may also be questioning whether your business will be a blessing or curse to the next generation. With existing business models and systems, these concerns may be valid. However, they may just be a short-sighted reaction to current and temporary economic pressures.
Think with me for a moment of the “what if”. What if you could beef up your business, address potential threats, and strongly position your company for success? If you did that, would passing the baton to the next generation insure the blessing you’ve always wanted for your children? For many family business owners, this is exactly their heart’s desire.
So first, let me give you a word of encouragement. In any difficult economic time, winning companies are born during times of extreme adversity. Did you know that GE, Microsoft, and Disney were all born and launched during a recession? Tough economic times are opportunity for those who can think outside the mass media hype. So here are five steps to successfully strengthening your company where passing the baton will be a blessing and not a curse.
- Face reality squarely in the eye. You must structure your company so that you make adequate profits in both up and down markets. Financial analysis and forecasting skills are crucial. If you don’t have them, you must get them or hire them in.
- Refuse to get “sucked in” to recession mentality. Your key to success will be to drive positive change into your business. Acknowledge what isn’t working and have a plan. While others become paralyzed in fear, you move forward! Seek and seize opportunities created by the recession.
- Grab available talent. One of the great things about recessions is top-notch people become available for employment at ultra reasonable rates. It’s a great time to pick up missing talent that will propel your company upward.
- Increase your sales, marketing and advertising effort. Since many competitors, especially those who are highly leveraged, will be hunkering down, now is the time to seriously grow your business. People will still be buying, and this is your opportunity to shine and rise above the crowd with a strong Unique Selling Proposition.
- Think Strength and Take Action! What separates winners is vision and action. Use your family as the catalyst that propels you into motion, especially when you most feel like stopping. There is no substitute for hard work. As one of my mentors says “it takes lots of heavy lifting before you soar”.
It’s my firm belief that family companies are the economic backbone of America. When a family business is strengthened, there are positive ripple effects of increased employment and spending. And that’s what will kick this economy back into high gear!
