Newspaper article THE JOURNAL RECORD

Share the Stress of Family Business Decisions

Newspaper article THE JOURNAL RECORD

Share the Stress of Family Business Decisions

Article excerpt

The business operations of a family business are similar to most ordinary businesses but the management and decision-making process is very different.

Family businesses are generally characterized by a "Patriarch" that typically started the business, is an entrepreneur and maintains a very autocratic method of management. From there, you have any number of combinations of children, spouses, brothers, sisters and even aunts, uncles and cousins. Some of these may be active in the business and others may not, but you can be sure that they all feel some stake in the business.

Business decisions are generally based on profit- and production- oriented goals. Personnel decisions focus on capabilities. Strategic moves are made for long-term success.

This utilizes the rational decision-making process.

"Family decisions" are based on the best interest of the family in the near-term. This reflects the use of an emotional decision- making process. Often, these decisions are compromises that are made to not disrupt the family and keep the peace at holidays. This tends to lead to a desire to maintain the status quo. Change is very uncomfortable and emotions often run high.

In today's fast-paced world, that tentative method of decision- making can be fatal to the small business.

How does a family business avoid this trap, yet maintain harmony within the family?

A successful business should already have a least three advisers in the normal course of business: their banker, accountant and lawyer. When choosing these professional services, be sure that they understand the special needs and uniqueness of a family business.

You must have trust and confidence in their capabilities. Often, their advice or questions will be uncomfortable. Many times when advice is contradictory to a family business owner's view, he feels that the adviser doesn't understand the business or the situation.

You must be honest and be sure that you are not denying or avoiding the reality of the situation. Remember, they are looking at the situation from the business perspective that is often contradictory to the family perspective. …

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