I have worked with a lot of family businesses over the past 20 years and the dynamics they face fascinate me. While everyone is not quite like the Roy family on the hit TV show “Succession”, there are unique issues that every family faces.
On The Small Business Radio Show this week, I talk about family business with Jonathan Goldhill who specializing in guiding next-generation leaders of family businesses to scale up their business as they take control over the leadership and ownership of the family business. Jonathan left New York for California at age 20 after his family’s large, privately-held men’s apparel manufacturing company—started by his great-grandfather—sold to a conglomerate in its third generation of family ownership. He has a new book called “Scaling Up a Family Business: 7 Things You MUST Get Right”.
Jonathan discusses his multigenerational business where everyone he was related was part of the company. The good news was that each of the family partners complemented each other. He says they decided to sell since no one in the third or fourth generation wanted to lead the company and manufacturing was started to shift to overseas. As part of the deal, the family partners stayed working with the business into their seventies.
Jonathan says its hard to pass along a family business to future generation because the “driving force” maybe missing; “many times future family members feel entitled to the wealth of the business and they are missing the entrepreneurial drive. Sometimes family businesses just eat you up inside, so they don’t want to continue and just get out.”
Here is what you must get right in scaling a family business according to Jonathan:
- Learn how to have difficult conversations with other family members. It’s hard because families have an established way to communicate with each other.
- You must be clear of why you are in business. People want to be part of a cause and values they believe in.
- Defined roles of family members; what the job and responsibilities of each member in an organization chart. This is critical so you don’t have employees play family members off each other.
Listen to the entire interview on The Small Business Radio Show.
This article, “What Family Businesses Must Get Right to Scale” was first published on Small Business Trends