CORONAVIRUS
BUSINESS RECOVERY STRATEGIES
“Now is the time for family business owners to consider coronavirus business recovery strategies” suggests leading family business expert Don Schwerzler. It is a time to think about re-visioning the family’s business, not just replacing the old policies, practices and operational methodologies.
Schwerzler has been advising family businesses for more than 50 years and is the founder of the Family Business Institute and the top ranked website Family Business Experts, both of which are headquartered in Atlanta GA.
"Given the far-reaching impact of the current economic crisis, the success of a family business will be defined by how quickly it can react to change," says Schwerzler. Having to respond to government mandated coronavirus related health responses such as “distancing” and “self-imposed quarantine”, many family businesses have been forced to close or to greatly reduce operations. Others have shifted their focus to serving customers online and restaurants and grocery stores are now delivering food and groceries. The impact of the business shutdown is being felt by family business owners, customers and employees. During these challenging times, things are changing every minute, and it’s hard to determine fact from fiction.
One of the fears for many family business owners, who have had to reduce the number of employees is that many of the employees may find employment elsewhere and will force the businesses, when they go back to business, to hire and train new employees in what had been a previously tight labor market.
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“So, the question they may want to ask is how to better organize the business for the future. The first step would be to re-vision the family business - not just rebuilding the family business,” notes Schwerzler.
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There are many coronavirus business recovery strategies that a business owner can use. “Key here is to make sure that specific responsibilities and accountabilities are delegated to each family member. Don’t have all the family’s resources working on the same problem,” recommends Schwerzler. It makes sense to create an updated mission statement(s) – one for the family and one for the business.
For many family businesses the re-visioning process is conflicted – between the perception of reality and reality! To help start afresh, a simple SWOT analysis can be done for every part of the family’s business. Being able to understand the strengths, weaknesses opportunities and threats is an essential coronavirus business recovery strategy. An easy way to ask the appropriate questions is to use Chaos Busters Management Guide – simply stated, 160 great questions for any business!
Once the business is future-versioned, an important next step is to “know” what technologies are available to the business owner to better re-organize the business. For instance, Digital Marketing offers more than just sales and marketing information – it can also be used to better organize operations to be more efficient and effective. Digital marketing programs can control communications and customer relations management. Using smart technology is an important coronavirus business recovery strategy.
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“Can other companies perform basic business functions better than you?” is a question asked by family business strategy master Schwerzler. Outsourcing can be a major coronavirus business recovery strategy. For instance, using a ghost writer to create marketing materials and content for your website. There are many options for payroll services. Likewise, equipment leasing (see here the many applications) can be crucial to better organizing the business – while not jeopardizing cash flow.
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Many businesses have been “forced” to have employees “work from home”. Now that the business is proving that it can do “work from home”, how can that be made more planful – be made more effective, efficient and secure. Perfecting these processes should be part of a coronavirus business recovery strategy. “Does your family business have an innovation program?” is another question posed by Schwerzler.
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Managing change can be tough work. There are several change management theories that can help reduce the complexity of the change management processes for family businesses, dealing with change and change management, can be far greater challenge than non-family businesses," according to Schwerzler. "For family business owners, understanding change management theories and how to adapt those practices to your family business could be critical to the survival of your business."
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A parallel process to re-structuring the family business is to re-define the roles and responsibilities of the Nexters – especially as the succession planning process is re-visited. “For many family businesses, the next generation of managers and owners are under-utilized” says Schwerzler. Succession planning should be a component of the coronavirus business recovery strategy.
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Although at present time “survival” thinking may be more important than “succession”, exit planning should be part of the coronavirus business recovery strategy. For family business owners, we have a no-cost “succession survey” to better understand some of the best practices – a “to do” list as business owner considers exit planning.
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Having a competent financial advisor can be a smart resource to use when developing a coronavirus business recovery strategy. There is a lot of federal monies being put into the private sector and it pays to have a finance expert who understands the government funding help for small-medium family businesses who do not have a CFO. Not handling the paperwork correctly could result in negative (expensive tax issues) consequences down the road.
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Speaking of taxes… one of the considerations for the coronavirus business recovery process could be a Family Limited Partnership that address concerns about minimizing estate taxes. Check with your lawyer and CPA to see if a FLP might be worth looking into.
If you are family business owner or if you work in a family business – we can answer any questions you may have – be they business issues or problems dealing with family dynamics that are impacting the business. FAMILY BUSINESS CONSULTING - All our communications are considered confidential and we provide rapid responses to any inquiries.
