Photo (CC) by Dana, on Flckr

Is your business a family business?

When most people hear that phrase they think in terms of some formal and regular involvement of family members in defined business activities with some payment for such activity.

Yet in the broadest sense, family businesses cover a much broader involvement of family members. The work might include the regular activities of the business or it may be an occasional job or it simply may mean help in planning and development. Taken to its extreme, the involvement may simply mean being there too help cover an emergency.

Also in a family business, payment for such work is not required.

Finally, the “family” connection is not fully defined. It may be blood-relative or an adopted child. It also may be an in-law, someone connected by marriage. Given our wide use of those considered family, there are many others who may be involved in the family business.

As a manager, it’s important to consider this as you operate the business. Your first step should be to determine who is working for your business who considers themselves “family.” Family members often have different ideas of their rights and responsibilities as well as their expected level of compensation. And certainly, they may have ideas about progression “up the ladder” as jobs become available.

Being aware of this can help navigate some of management decisions that will need to be made. Family relations are complex. Business relations are complex. Now mix the two together and you have great opportunities for unhappiness and dissension.

Avoiding, or at least minimizing, these potential negative aspects begins with understanding where everyone is coming from. Open communication is also important as is talking about certain sticky points before they become a problem.

Don’t assume that a one-time conversation, even if everyone seems in agreement, is the end, however. Keep revisiting and checking to see if feelings and desires have changed.

Family businesses can be a great place to work. Your proactive efforts as a manager can make them stay that way long into the future.

Photo (CC) by Dana, on Flckr

Earlier this year, I did a blog post on the importance of “Family Businesses in the Economy.”

Most of us patronize these businesses, but probably don’t think much about them. Who are the owners? What types of businesses do they run? How successful are they?

Prior to retirement, I was part of a group of individuals who looked at these and other questions. Some of our questions have focused on the exchange of resources between the family and the business. That exchange offers great opportunities but also can be a trouble spot if family members do not feel some sense of equality.

Recently, our team has completed a fourth survey with the same set of business owners giving us a look at how family businesses have performed over time. It also examined the strategies used during the U. S. recession of 2007 to 2009. Our review included how the businesses fared as well as more on the strategies used both during the recession and since then.

As might be expected some of our family businesses experienced a downturn during the recession with some closing their doors. Finances, health, and retirement were the leading reasons for closure.

Yet, other family businesses said it was a strong period for them. This was the case if they had steady customer demand, a strong market, and fewer competitors.

In terms of changing practices or strategies during the recession, nearly one-half of businesses who said they experience trouble made no changes. Those who did make changes more often had family members work without pay, changed the number of employees they had, and had other relatives work in the business without pay.

In our work, we also looked at changes in the global market place that impacted family businesses. During the period covered by our last survey (2006 – 2017), the growth in the online world occurred. Positive revenue increases were found when a family business focused on a single or small set of online options and either dedicated part of an employee’s time to do so or hired a outside consultant.

This overview is offered to give you some ideas of what worked and what didn’t in family businesses just like yours. Learning from others like us can have a great impact on your business.

To learn more about the early results of our study, check out:

• Webinar presented for North Central Regional Center for Rural Development – https://www.youtube.com/watch?v=NjB0tgnjuzc&feature=youtu.be
• PowerPoint slides:
  • http://ncrcrd.msu.edu/uploads/files/NiehmMuskeFitzgerald.pdf
  • or
  • https://www.slideshare.net/glennmuske/family-business-contributions-to-sustainable-and-entrepreneurial-rural-communities-over-time

Family businesses build strong economies. Get some tips on how you can sustain and enhance your business and its contributions.

Photo (CC) by Dana, on Flickr

Did you know that:

• You will find a family business in one out of every 10 households.
• Family businesses contributed over $10 trillion, by one estimate, into our U.S. economy.
• Family businesses generate over 50% of U. S. business revenue.
• Family businesses employ over 50% of the U.S. workforce.

Do you get a sense of my topic this week? Yes, it’s the role and contributions of family businesses to the economy.

Family businesses are found in all segments of the economy, from large (Walmart) to micro in size (one person working in a corner desk after they have worked in another job all day and handled their family responsibilities). And you will find them in every segment of the economy, but dominating in farming and retail.

The family business is a unique entity as it combines the traditional business system along with the family system. And all of this while being a part of the larger community system.

With these connections, family businesses can, and do, have the ability to use the resources and time of family members in helping to get work done. This enables them to get more done when the pressure is one.

They also have been found to be more successful when the community is supportive of the business.

Strong family businesses and strong communities occur when the intermingling and exchange of resources is a two-way street. Family business provide community resources. It may begin with a paycheck to community members but it often reaches far beyond.

The most common community support provided by family businesses includes direct and indirect financial support to events, charities and even the paying of taxes. In communities that are struggling, the amount of this support often grows.

Next, there is the involvement in community leadership,  roles that various family members take on.

Technical assistance is another form of support offered by family businesses to communities.

I have had the good fortune to work on the Family Business Research group for some time.  Given the prevalence and importance of family businesses in rural communities, we wanted to dig deeper into who these businesses were and how they worked internally as well as interacted with the community.

Recently the group has released a 20-year highlight newsletter. You can find it at: https://www.ag.ndsu.edu/smallbusiness/documents/family-owned-business-research-highlights-2016. You can also find a list of the over 400 publications produced by the group as well as a link to the group’s annual and project reports.

According to Heck and Stafford (1999), two members of the research group, the importance of family businesses to our economy and society is only exceeded by the family unit itself. They are a vital economic engine. Their support will help everyone grow.

If you operate a family business, thanks and good luck.  If you know a family business owner, stop in, say hello and check out their offerings.

Photo (CC) by Dana, on Flckr

You will find a family business in one out of every 10 households.

Family businesses contributed over $10 trillion, by one estimate, into our U.S. economy.

Family businesses generate over 50% of U. S. business revenue.

Family businesses employ over 50% of the U.S. workforce.

Do you get a sense of my topic this week? Yes, it’s the role and contributions of family businesses to the economy.

Family businesses are found in all segments of the economy, from large (Walmart) to micro in size (one person working off of their table after they work another job all day and handle their family responsibilities). And you will find them in every segment of the economy but dominating in farming and retail.

The family business is a unique entity as it combines the traditional business system along with the family system. And all of this is done while being a part of the larger community system.

With these connections, family businesses can, and do, have the ability to use the resources and time of family members in helping to get work done. They also have been found to be more successful when the community is supportive of the business.

Yet this intermingling and exchange of resources is often a two-way street with businesses providing resources, beyond a paycheck, to the family as well as being a supporter of the community. Such community support, though, is often tempered by the perception of the business owner as to how much the community is supporting them along with business revenue and the age of the owner and the business.

The most common community support provided by family businesses includes direct and indirect financial support. In communities that are struggling, the amount of this support only grows as do we see the involvement in community leadership roles of family members.

Technical assistance is another form of support offered by family businesses to communities.

I have had the good fortune to work on the Family Business Research group for some time. As these businesses are so prevalent and important in rural communities, a better understanding is helpful in developing a stronger group.

Recently the group has released a 20-year highlight newsletter. You can find it at my website, https://www.ag.ndsu.edu/smallbusiness/documents/family-owned-business-research-highlights-2016. You can also find a list of the over 400 publications from the group and the annual reports that have been filed.

According to Heck and Stafford (1999), two members of the research group, the importance of family businesses to our economy and society is only exceeded by the family unit itself. They are a vital economic engine. Their support will help everyone grow.

If you operate a family business, thanks and good luck.  If you know a family business owner, stop in, say hello and check out their offerings.

Riverbound Farm by Glenn Muske

Co-preneurs, or couples in business together, get very little attention in the study of business ownership. This lack of attention largely comes from the myth that they are small in number and the businesses they run are small in size.

The reality, though, finds that co-preneurs are a substantial part of the business community. Research has found that nearly one-third of family businesses are owned by co-preneurs.

While this may still seem small, you must realize that one in 10 households operates one or more family businesses. This translates to 12.2 million family businesses and more than 4 million co-preneurs.

Going into business with your spouse seems like a utopian opportunity. Such couples have the chance to blend their work and family dimensions. The perception is the situation allows for greater control over both systems, and means that family values and time can be fully integrated with business needs.

The bottom line is that the arrangement can blur the boundaries of home and office. Co-preneurs often envision stronger marriages and businesses because of the intertwining.

Before going into business together, though, couples need to ask themselves if this is the right choice for them. Adding a work relationship while maintaining a personal relationship is difficult.

Couples thinking about entering a business relationship need to consider several key areas.

First, couples need to have solid communications. And saying you will establish that is not nearly as strong as already having it in place. Plus, the ability to communicate with your spouse about difficult issues must work in both systems, the family and the business. Co-preneurs also need to be able to handle issues that bridge the two systems.

The second discussion a couple should have is to clarify roles and responsibilities in the proposed business, as well as how existing roles and responsibilities in the family might change.

What also is important in developing a co-preneurial business is agreement on business values and direction. You probably have similar family values, but business values may differ. You also need to agree on what the business will be, how each would like it to grow, and even whether the business operates from home or somewhere else.

You need a similar discussion around how comfortable each person is with risk and what each person may be willing to give up or change to make the business successful.

Going into business together can offer great opportunities. However, it also can add additional stress to a relationship. Make no assumptions about what it can do for a relationship. Instead, have some long conversations before you make the move.

Co-preneurs can have the best of both worlds. Just remember: Making that happen takes work!

Red Trail Vineyard by Glenn Muske

Whether you have been in business for years or are just starting out, whether you are a product or service business or whether you are home-based or on Main Street, you all have one thing in common: Your family and small business are closely linked.

Any action you take in one easily can affect the other.

One thing that you probably do, true to some degree in most family businesses, is to intermingle time and money.

And even if intermingling does not occur, the family becomes an integral part of the business, whether by intent or not, and can influence business success. Not only is the business influenced, but family functioning and family success typically also are influenced when a business owner resides in the household.

Often the only link between the family and business is the cash transfers between them. In many cases, those cash transfers are from business to family at first, with the later goal of transferring money from business to family as the business grow and prospers.

The perception that what happens in one area does not affect the other comes from the common misunderstanding that the business and family are separate.

Given the interconnectedness of the family and the business, business owners and family managers often ask what can be done. Understanding the influence each system can have on the other will have a major impact on making this a positive instead of a negative.

The first step is to sit down with all family members and discuss why and how the business will fit into the existing family routines and what adjustments they might need to make.

Identifying how the business may impact the family finances and family time is important during these early discussions. Acknowledge that changes will be necessary.

As part of the discussion, identify the priorities and build a plan that allows family priorities to remain in place to the extent possible. This will mean coordinating schedules so family members face no surprises.

And while the business may seem to be taking while the family always is giving, look for and verbalize where and how the business can and will give for the family.

Acknowledge that the business and family are both partnerships. Ask other family members to help in the business, but also, as the business manager, ask how you can, in return, help with the family duties.

Allowing the family to participate in the business and seeing you take a role in family duties will help all members develop a sense of belonging. This will encourage the support and understanding of all the members. The activities need not be large. Even small tasks can mean a lot when working as a team.

As you, the business manager, do your scheduling, ensure that time is set aside for family. Remember that maintaining a sense of balance is important. Secondly, schedule quiet time that allows you to focus on work, not the daily routines of work but looking ahead.

Small businesses are a key economic force in our economy. Developing them and helping them succeed is key. The family plays a crucial role in that success. Open communication and involvement can foster that role.