Family Business Blog
The Family Business Blog [short for "web log"] is our mini-journal about Family Business Experts. It lets you know...
- whenever we add or update pages at the Family Business Experts web site
- about new products and services that we are bringing online
- about features and specials that are available from time to time
- when FBE principals are in the news
- when we issue our Understanding Family Business e-zine newsletter (for those of you who don't like to give your e-mail address, or if your ISP's filters are too aggressive and cause you to lose mail). The e-zine is posted to the web site as well as being e-mailed, so you can click right to it from this blog. Easy!
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Family Business Advisor
Family business advisor Don Schwerzler, top family business expert and founder of the Family Business Institute has been studying and advising family businesses for more than 40 years.
Succession: Whose Job is It?
For some family businesses the transition period from one generation to the next is positive and productive while other family businesses experience significant problems that can wreck the business and destroy family relationships.
Tensions and disagreements in a family business are often the result of organizational overlap – where responsibilities are not clearly understood by the family members, the non-family managers, employees and sometimes even vendors and customers!
We think the responsibility for preparing the business for transition from one generation to the next should be assigned to the future leaders and owners of the family's business!
Don Schwerzler, leading family business expert and the founder of the Atlanta-based Family Business Institute has more than 40 years of experience helping family businesses with succession issues. “When we are doing our Family Business Assessment, rarely do we encounter a Nexter who does not “know” the family business – most have been “in-training” most of their lives, if not directly in the business, certainly by osmosis around the dining room table! The discussions about the business become the discussions of the family.”To learn how best to energize and organize the Nexters into the succession planning and succession management process, click on the link at the bottom of this blog.
Advisory Board Benefits Family Business
An advisory board made up of experienced outsiders brings a fresh perspective to problems and opportunities that face both the family and the family business.
Don't Depend on Government to Save Your Family Business
“Future Proof” Your Family Business!
As we work around the country speaking with family business leaders, one of the most common concerns is the atmosphere of “uncertainty” that has been created by the growth and reach of the federal government. Especially frightening is the expansion of the regulatory agencies such as the EPA, the politicization of agencies like the IRS and the general incompetence of agencies like the Veterans Administration where system-wide practices help to deceive the American public.
In general, our political leaders, at all levels of government, have failed to take effective action to reduce government spending and to eliminate debt. Not hard to understand when one realizes that more than 50% of the people in the US do not pay taxes; entitlement programs are out of control; borders are not secure from illegal immigration and other security threats.
Frankly, the leadership failure has been so bad, the problems endemic at every level of government, that it is hard to imagine that the same political apparatus that caused the problems – is going to solve the problems! Case in point, the “weak-willed” options put forward to engage our country's current economic problems that amount to symbolic platitudes and political posturing that will have the same results as trying to save the Titanic by re-arranging the deck chairs.
“So don’t expect your government to protect your family business – every family business should be taking immediate action to “future proof” their family
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Family Business Institute
Family Business Institute is Atlanta based and founded by Don Schwerzler - provides success strategies for family businesses
Planning for Retirement: Time to Sell the Family Business?
When a family business owner is planning for retirement, a profound and basic decision must be made: whether or not to pass the business on to the next generation. For some families, selling the business may make more sense than passing the business to the next generation. In fact, studies indicate that the best way to create and increase the wealth of the family, selling the business and passing the money (rather than the business) to the next generation is the better option.For some family business owners, creating the business legacy for the kids and grandkids is a powerful fantasy, one that is not shared with the next generation. They may prefer to cash out the family business so they can re-invest the money in a new and exciting venture.When the decision has been made to sell the business, the next step is to insure that the sale price of the business is maximized – and that is when the family business owner needs to get expert advice. While family business entrepreneurs have a notion that they can do most anything, not having expert help when getting the business ready for sale is tantamount to fumbling the football on the goal line with no more time on the clock!For more information on maximizing the sale price of your family business, click on the link at the bottom of this Blog.
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Family Business Innovation - “If it ain’t broke, break it”
Family business innovation drives entrepreneurship, not caretaking. Learn how to start an innovation program and 10 mind sets that have to change.
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Brand Management & The Family Business
At a recent workshop for family business owners, one of the topics for discussion was brand management.
Each of the participants talked about marketing the products and services produced by their family’s business.
The discussions ranged from the first effort (when grandpa decided to get business cards to better market the business!) to more sophisticated techniques and strategies, including websites and the use of social media like Twitter, Facebook and LinkedIn.
Interestingly enough, not one of the business owners talked about marketing the “brand” of their family business.
Why is this important?
First, the “familiness” of the family business should be embedded in the marketing of their products and services. Research shows that being recognized as a family-owned business builds trust and confidence with customers and vendors alike.
Secondly, we think it is a significant problem for many family businesses - their entire marketing effort is focused on promoting products or services and little or no attention is paid to promoting the company in a way to create interest from potential buyers for the business, including the M&A experts.
When planning for retirement, the exit strategy most favored by family business owners is to pass the business to their kids.
But when it comes to creating wealth for the family, selling the business may be a better option!
To learn more about the M&A option as a strategy for family business owners planning for retirement, click on the link at the bottom of this page.
Performance Standards Clear Measurement
Performance standards clear measurement depends on these underlying leadership practices. Learn about them.
Exit Planning
Exit planning is necessary because you will transfer your business interest - either during your lifetime, or you will die or become incapacitated. Learn how to avoid the chaos of forced liquidation.
Buy-Sell Agreement Can Save A Family Business
Family Feud: How a buy-sell agreement can save a family-owned business is the title of an article written by Philip M. Perry in RV PRO magazine featuring Don Schwerzler, the managing director of Atlanta-based Family Business Institute. The on-line digital edition is available at http://rv-pro.com/magazine/digital-version-library
Developing infrastructure is key to formalizing the management style of a family business – and the family is wise to consider partnership agreements, one of which is the buy-sell agreement
Buy-sell agreements are critical to the family business as part of the succession planning process. As a family business transitions from a single owner to a sibling partnership, the family business dynamics get more complicated and even more so if the business becomes a cousin consortium.
To read more about buy-sell agreements, click on the link at the bottom of this Blog
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Regretting the Loss of Family Communications
For most of my professional career (50+ years) I have been a trusted advisor to family-owned business – helping them to deal with the complexity of family business dynamics.
Generational transition is a time when many of the problems that impact family businesses percolate to the surface.
One of the main problems causing these intense problems that can wreck a family business and destroy family relationships – simply said, “communication issues”.
As a grandfather, with 8 grandchildren, I have been worried about how technology is impacting the communication opportunities for my family – kids and grandkids. On one hand, I am impressed by the degree of technology savvy, for even the youngest of my clan. On the other hand, I miss the conversations that my generation of family remember as being such a critical linkage amongst our family members.I have expressed my concerns to others of my age – and I find that the grandparents I have talked with – 100% per cent share my concerns. That certainly is a telling statistic! When it comes to family communications and interaction - as technology is expanding (smart phones, iPads, etc.) face-to-face interpersonal family communications are shrinking. The opportunities to perfect our skills as communicators dwindle. I, for one, think it is a shame. Discussions around the dinner table have fallen by the wayside to sharing Tweets and getting “likes” on Facebook.Think about what everyday changes you can make – before it is too late…
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Coronavirus Business Recovery Strategies
developing a coronavirus business recovery strategy can help the business survive.
Planning Key to Successful Generational Transition
Sometimes the failure of the flawed succession planning process is recognized only after the death of the parents when the "plan" is sprung on the family during the reading of the will - and the legacy the parents were trying to create for their children and grandchildren is destroyed because of greed, misunderstandings and the lack of involvement in the family succession planning process.The family succession plan should recognize and accommodate the needs, goals and objectives of each family member. "The family's goals and objectives then become the basic building blocks for the development of the succession plan for the family's business," according to top family business expert Don Schwerzler "It is extremely important to first develop the family succession plan and then the succession plan for the family's business. Otherwise the business owner will spend a lot of time and money developing a business transition plan that will almost always fail to reach the desired results."
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4 Ps of Marketing - The Controllable Elements of Your Marketing Plan
The 4 Ps of marketing classify the controllable elements of your marketing plan. Product, place [distribution] and promotion are all expenses; price brings in revenue.
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"Future Proof" your Family Business
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A question every family business owner should be asking, “Do we have a strategy in place to future proof our family’s business?”
“That is a question every family business owner should be asking – and answering,” according to leading family business expert Don Schwerzler.
In general, our political leaders, at all levels of government, have failed to take effective action to reduce government spending and to eliminate debt. Not hard to understand when one realizes that more than 50% of the people in the US do not pay taxes; entitlement programs are out of control; borders are not secure from illegal immigration and other security threats.
Frankly, the leadership failure has been so bad, the problems endemic at every level of government, that it is hard to imagine that the same political apparatus that caused the problems – is going to solve the problems! Case in point, the “weak-willed” options put forward to engage our country's current economic problems amount to symbolic platitudes and political posturing that will have the same results as trying to save the Titanic by re-arranging the deck chairs.
“So don’t expect your government to protect your family business – every family business should be taking immediate action to “future proof” their family business,” notes Schwerzler
Family Business Experts
Family Business Experts 20 person team is nationally recognized for our work in pioneering the multi-discipline approach to solving the unique and complex problems that impact the family business.
Risk Management Insurance
Risk management insurance offers protection against a broad spectrum of litigation threats.
Unfortunately, many family businesses have a false sense of security about liability litigation - a problem that would likely not befall them.
A common thought amongst many family business owners is that litigation/lawsuits are something that happens to other businesses…
The reality, however, is that even when the family business owner is “right”, defending against lawsuits can wreck years of hard work building a family business, endanger the family’s wealth and destroy the financial security of the family business owner.
Chaos Busters
Chaos Busters - The Management Guide provides questions that will make your organization more effective, efficient and scalable
Ask The Family Business Expert
ASK THE FAMILY BUSINESS EXPERT
Conflict in a family business is one of the most serious categories of problems that impact the growth and success of family businesses – problems that keep the family business from reaching its true potential.
What are the major categories or sources of conflict in a family business? According to a survey conducted by a large accounting firm, family business leaders reported:
• 30% - Discussions about future strategies
•27% - Performance of family members active in the business
•22% - Decisions about reinvesting profits vs paying dividends
•19% - Decisions about who can or who can't work in the business
•18% - Compensation for family members in the business
•15% - The business role in-laws should play or not play
•13% - Failure to consult the wider family on key issues
In fact, conflict can jeopardize the “survivability” of the business, especially when the business is transitioning from one generation to the next.
For instance, succession studies show that only about 30% of first generation family businesses successfully transition to the next generation. It is not difficult to understand that a primary contributing factor to this stunning statistic is - family business conflict.
Of all the relationships we build throughout our lives, none are more complicated, yet delicate, as those within our families. It is the complexity of these relationships which can tip the scales between success and failure of a family business.
“Ask the Family Business Expert” is a service provided by Atlanta-based Family Business Institute and their web organization Family Business Experts.com
If your family business seems paralyzed by conflict or indecision in trying to maximize the true potential of the family’s business, we offer a free and confidential consultation – just use the Ask the Expert form at the bottom of this Blog
family business conflict
Family business conflict can destroy a family business and wreck family relationships
Family Business Feuds - Dealing with In-laws
When a family business owner contacts us for help, one of the most frequent problems is how to deal with ongoing “family feuds” amongst the owner’s children.
One of the fancy words to describe this situation is “cognitive dissonance” which refers to a situation involving conflicting attitudes, beliefs or behaviors.
One client we worked with in the construction industry, the dad had two sons working in the business. Both brothers had engineering degrees, were in their mid 30’s and got along very well. The dad had begun to transfer stock to the boys – and everything seemed to be on track to turn the business over to the sons so the dad could retire.
The older brother preferred to be working on the construction sites managing the work force while the younger other brother preferred working in sales, bid preparation and administrative duties. This created an ideal environment as each brother had their own area of responsibility.
Problem – the wives of the brothers did not care for each other! They each brought a different set of values to the equation.
They were quite different – one had 4 kids and enjoyed doing home-related activities just like her mother-in-law (cooking, baking, sewing, gardening, etc.) while the other daughter-in-law was a professional engineer who did not want children and did not care to participate in the activities of the family.
One can only imagine how much fun the family was having on their weekly Sunday dinners where dad and the two sons talked business!
One daughter-in-law talked and had fun with the mother-in-law while the other daughter-in-law remained behind closed doors so she could work on her computer (she worked for an engineering firm) and did not want to be bothered by her young nephews and nieces!
If you are involved in a family business, it is important to take action on dealing with family feuds – they rarely get better by being ignored, they generally get worse and up hurting the family business and wrecking family relationships.
We help solve family feuds – simply contact us for a free and confidential consultation.
To learn more about dealing with family feuds, click on the link at the bottom of this Blog
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family business help
If you are a family business owner seeking family business help - you have come to the right place!
Altruistic Marketing
Family businesses are the economic cornerstone of most communities.
They support the community through civic organizations, supporting schools, sports programs, charities and churches.
The motivation is all about the spirit of giving.
Public companies also contribute to the community – but they tend to be smarter about “altruistic marketing”.
They publicize what they are doing so they gain recognition for their good deeds - it helps to promote their brand in a very positive way.
For instance, the Budweiser Beer bottling plant in Rome GA stopped beer production and started filling cans with safe drinking water for the victims of hurricanes.
Budweiser shipped more than 44,000 cases of water – that is more than a million cans of safe drinking water to their beer distributers in the affected areas (most of the distributers are family-owned businesses) for distribution to the Red Cross disaster relieve teams.
We are pleased to recognize Budweiser for their generosity. The point being made here is that their marketing and PR departments made sure the good deed was reported in the press, TV, and the Internet. That is the essence of altruistic marketing.
To learn more about how your family business can benefit from altruistic marketing, click on the link at the bottom of this Blog.
Packaging Products and Services
Packaging products and services is the crucial junction where products and services are conjoined with marketing and advertising strategies to improve branding and value perception that will increase
Family Business Feuds
When a family business owner contacts us for help, one of the most frequent problems is how to deal with ongoing “family feuds” amongst the owner’s children.
One of the fancy words to describe this situation is “cognitive dissonance” which refers to a situation involving conflicting attitudes, beliefs or behaviors.
One client we worked with in the construction industry, the dad had two sons working in the business. Both brothers had engineering degrees, were in their mid 30’s and got along very well. The dad had begun to transfer stock to the boys – and everything seemed to be on track to turn the business over to the sons so the dad could retire.
The older brother preferred to be working on the construction sites managing the work force while the younger other brother preferred working in sales, bid preparation and administrative duties. This created an ideal environment as each brother had their own area of responsibility.
Problem – the wives of the brothers did not care for each other! They each brought a different set of values to the equation.
They were quite different – one had 4 kids and enjoyed doing home-related activities just like her mother-in-law (cooking, baking, sewing, gardening, etc.) while the other daughter-in-law was a professional engineer who did not want children and did not care to participate in the activities of the family.
One can only imagine how much fun the family was having on their weekly Sunday dinners where dad and the two sons talked business!
One daughter-in-law talked and had fun with the mother-in-law while the other daughter-in-law remained behind closed doors so she could work on her computer (she worked for an engineering firm) and did not want to be bothered by her young nephews and nieces!
If you are involved in a family business, it is important to take action on dealing with family feuds – they rarely get better by being ignored, they generally get worse and up hurting the family business and wrecking family relationships.
We help solve family feuds – simply contact us for a free and confidential consultation.
To learn more about dealing with family feuds, click on the link at the bottom of this Blog.
Search Our Entire Site
Our search form will open up the entire site to you in moments. The navigation index will show you the entire site at a glance.
Simplify Your Family Business & Improve Profits
Management guru Peter Drucker observed that "There is nothing so useless as doing efficiently that which should not be done at all".
That one statement makes clear the difference between being an “efficient manager” and being an “effective manager”!
One of the major problems causing a family business to fall short of reaching its true potential is that the boss, along with many key members of the management team, are involved in busy work that could be done better by subordinates – or not be done at all!
In other words, too much management time is spent on a range of activities that do not create “significance” for the business.
“In the more than 50 years I have been advising family business entrepreneurs, I have never had one of these success-driven business people ever tell me they did not have enough to do,” notes Don Schwerzler, leading family business expert and founder of the Atlanta-based Family Business Institute and their web organization, Family Business Experts.com
“To the contrary, the single most common complaint I hear from these business leaders is that they are too busy, sometimes overwhelmed with work.
"They complain they have too much on their plate or that they know a lot of things they could do to improve their business – but they just do not have enough time to take on more work.”
Solving that dilemma is what we do when we are working with a family business client.
Not solving that problem is why so many family businesses are described, by merger and acquisition experts, as being an “under-performing asset”.
Ron Ashkenas, an organizational consultant, offered some smart tips in a recent blog discussing the importance of reducing excessive (or read as unnecessary) activities in an organization:
Separate cost-reduction from work-reduction. Since people are naturally (and understandably) protective of their livelihoods and careers, it's difficult to ask them to do things that will result in the loss of their own job.
Make work elimination a group activity. While managers are hesitant to point out stoppage possibilities in their own areas, they often can see opportunities elsewhere.
Insert a "sunset clause" in the charter of all new committees, teams, and projects. Instead of swimming against the tide in trying to stop ongoing endeavors, make the shut-down process a natural event in the life cycle of organizational activities. If people know from the start that there is a beginning and an end, then managers will start to expect that things will be turned off at a specific time and can plan accordingly.
As we begin our work with a family business, one of the first steps is to conduct a Family Business Assessment. Our Assessment produces the insights necessary to better understand the dynamics that drive the business and that impact the family. To learn more about our Family Business Assessment process, click on the link at the bottom of this Blog.
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Family Business Assessment
Our Family Business Assessment process has been perfected over 40 years working hundreds of family businesses, large and small and a broad spectrum of industries
Mukoyoshi – a Japanese succession strategy
It has been reported that Japan has the world's second highest adoption rate of more than 80,000 a year - but most are adult men in their 20s and 30s!
The reason is a uniquely Japanese-style adoption known as Mukoyoshi – a Japanese succession strategy used by family businesses.
In 787 AD a guest house was built near a hot spring by Garyo Hoshi who adopted a son as his successor who took his childhood name Zengoro.
Since then, for nearly 1,300 years, the hotel and the name - Zengoro Hoshi - have been passed down the family for 46 generations!
That is how the world's oldest family business - according to the Guinness World Records - is believed to have started.
Through the years, when the family did not have a son to run the business, they adopted the husband of one of the married daughters who would actually change his name as part of the adoption process.
Thus, Mukoyoshi ensured the continuation of the business by a member of the family.
Today in Japan, many of the leading multi-generational family-owned businesses are led by adopted sons of the founding family!
To learn more about succession management for your family business, click on the link at the bottom of this Blog.
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Don Schwerzler Interview
In the early 80's Don Schwerzler founded the very first multi-disciplined, full-service resource for family-owned businesses.
Commercial and Residential Rainwater Harvesting
Water is essential not just to industry but to life. Many urban areas are operating in a crisis mode due to present or near-future water shortages. A fast and easy fix is rainwater harvesting. Take Atlanta – it has been dealing with major water problems for years.
Atlanta receives more annual rainfall than Seattle, a very wet place noted for its rain. Rainfall in Atlanta is three times that of Los Angeles, eight times more than Phoenix.
If Atlanta and Georgia started the process to build new reservoirs today (which it has), it will be 20 years before they are functioning – not to mention the huge expense for constructing a reservoir.
“Rainwater collection should be pursued as part of every city’s overall water management plan,” suggests rainwater harvesting expert Bob Drew.
50 inches of rain falls in Atlanta every year. A properly designed rainwater collection system truly is a small reservoir with many advantages over the types of large reservoirs we normally think about.
In addition to offering excellent financial returns and protection from watering bans, rainwater collection can be part of a business’s sustainability effort.
Collectively, rainwater collection rivals larger reservoirs in water supplied and can be implemented much faster and with private financing.
Examples abound of businesses that can supply a large portion of their water using rainwater collection.
Restaurants use hundreds of thousands of gallons of water annually for toilet flushing alone. All of that can come from rainwater.
Turner Field, home of the Atlanta Braves, has significant needs for watering its field and grounds cleaning. Rainwater has been shown to work fine for that. Next time you visit Turner Field – check out the water collection system installed by Ecovie, a rainwater system design and installation company.
Rainwater supplies 80% of the irrigation and toilet-flushing needs for Oliver House, a new 88-unit senior living facility in Decatur, GA.
By using rainwater, a company is green, as well as smart. Rainwater doesn’t reduce downstream water flow like larger reservoirs, there is no erosion, and it’s sustainable.
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"Battleground" Describes Your Family Business?
A battleground can result in the family business from mixing good family behaviors with an effective business system.
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Nexters
For many family businesses, kids home from college work in the family’s business.
“These young people, perhaps future owners of the business, are rarely engaged in the business in the most productive manner,” says leading family business expert Don Schwerzler. “The types of work they are assigned tend to be short-term and not necessarily connected to the long-term vision of the business.”
Many of college kids can bring fresh ideas to the business – new technology and new business development techniques. One sure fire opportunity is having the young people explore how social media strategies can create better branding results for the family’s business.
Another suggestion is to engage college-aged young people, the Nexters, in the succession process, early on. Don’t just assign them to work in the business for the summer, but consider assigning the jobs they will be doing do within the context of learning what will be needed to transition the business from one generation to next. “Think “strategic” when assigning jobs to the Nexters”, notes Schwerzler.
To learn more about the role of the Nexters in the succession process, click on the link at the bottom of our Family Business Blog.
Family Business Entrepreneurs
Family Business Entrepreneurs
Family business entrepreneurs drive the American Economy according to leading family business expert Don SchwerzlerIt is not surprising that most family business entrepreneurs can first be described as inventors and innovators – a new concept, a new idea, a better mousetrap, a smarter/faster manufacturing process… “But being an inventor or an innovator is only part of the equation for being a successful family business entrepreneur,” according to Schwerzler.The formula also includes vision and the wherewithal to turn that vision into a new reality – that is what makes a family business entrepreneur so special. As individuals they have a great deal of passion, energy and the ability to make personal sacrifices - a laser-focused commitment to being successful and, as is often the case, a healthy shot of “serendipity”!To read more about how family business entrepreneurs create and sustain their own success, click on the link at the bottom of this Blog.
Family Business Experts
Family Business Experts is the best family business resource on the Internet. We offer hundreds of great strategies and tips for families in business together.
Need Money? Alternative Financing May be the Solution
Family business owners who need money to deal with cash flow problems should investigate alternative financing such as factoring and equipment leasing.Other helpful financing options include:Transactional FundingGovernment Contract FinancingLines of Credit Commercial Real Estate FinancingEquipment Finance & LeasingVendor Sales LeasingLoans (personal and business)Import & Export Financing
The "home town banker" was the traditional loan maker to family businesses. But as local banks were gobbled up by the larger regional banks, the ability for a family business owner to call his/her friend down at the bank for a short term loan are days gone by!
"Smart family businesses have found that there are many other financing options - it is just a matter of finding the best financing option to meet the needs of your business," according to top family business expert Don Schwerzler.“If you are a family business owner who is experiencing cash flow problems, our family business financing expert may be able to help”. To learn more about creative financing for your family business, click on the link at the bottom of this Blog.
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Family Business Executive Coach
Our family business executive coach can help a family business realize its true potential - helping businesses perform better and improve the value proposition