It’s staggering to think that about 90% of businesses are family owned or controlled. It’s clear that while family businesses do have their share of conflict and problems, they have a high success rate. Here are some of the possible reasons why family businesses are successful:
Faster Decisions
In a corporate or state operated business, great ideas are often lost in the bureaucratic process. When progress and creativity is stifled this can restrict opportunity for growth. A family business generally doesn’t have a large bureaucratic process and can therefore implement positive changes faster.
This not only applies to innovation and creativity, but also to problem solving and solutions. Problems can be minimised when they are dealt with quickly within a business. Family businesses are usually better equipped to quickly deal with problems.
Relational Experience
Although family members may have disagreements sometimes, they are usually able to quickly resolve them. They have had a lifetime of experience working and living together and know one another well. This means that conflict and disagreement is often solved quickly and doesn’t affect productivity and workplace cohesion as it otherwise would.
Shared Motivation
A family business is more likely to have more people in it who are motivated to succeed. This common motivation is because everyone is working together towards a common goal. Generally, everyone has much more to benefit from the success of a family business.
Large corporations often struggle to motivate their workforce to be productive because there isn’t much personal benefit to gain. Workers are working for wage which stays the same whether they work hard or not. The challenge of extrinsic motivation is easier to solve in a family business.
Accountability
When the members of a workforce all personally know one another there is a higher level of accountability required. Workers in a family business usually live in the same community as the business operates in. They want their friends, family and associates to be able to trust them and believe in their product.
The implied accountability of a family business can create more trust with potential customers. An example of this is family business Hammer and Brush. The husband and wife carpentry and painting team will often find customers utilise both their painting and carpentry services once they discover they are a husband and wife team. This has led to a lot of growth for the business and long list of happy, repeat customers who are happy to recommend their services.
Authenticity
When someone works for a corporation, they often have to stay quiet about things that upset them or they may not believe in. The company misses out on vital information from their workers on the ground, where the most important transactions for the business take place. In a family business there is a level of familiarity which, if managed well, can lead to better growth and innovation. An open environment which allows people to freely express ideas and problems is a healthy environment. This type of business is far more likely to grow and progress through informed collaboration.
Conclusion
As you can see many family businesses have the right recipe for success. If you are considering starting your own family business, then go for it. As you can see the statistics are on your side. There are many advantages to running a family business that shouldn’t be overlooked.