Wyoming Business Tips for March 4-March 10
A weekly look at Wyoming business questions from the Wyoming Small Business Development Center (WSBDC), part of WyomingEntrepreneur.Biz, a collection of business assistance programs at the University of Wyoming.
By Leonard Holler, WyomingEntrepreneur WSBDC regional director
"Why are family-owned businesses so special to us today?" Jill, Saratoga
Family-owned businesses are stable and optimistic, even in times of economic uncertainty.
The American Family Business Survey of family-owned businesses studied the strengths, challenges and changes since a previous study conducted in 2002, according to a recent national study by Kennesaw State University.
It found that family business owners:
-- Are optimistic about future growth. Even during some generally depressed business conditions, family business owners express optimism. Figures confirm that family businesses are better able to weather economic hardship and stabilize the economy than their non-family counterparts.
-- Lack a sense of urgency about retirement and succession planning. Family businesses face some significant succession challenges. More than 40 percent of business owners expect to retire within the next 10 years, but many are less certain about retirement. Almost one-third have no plans to retire, ever. Nearly another third report that retirement is 11 or more years away. This means that many owners plan to die running their business, which is not beneficial to their family, the business, its employees or customers. Nearly one-third have no estate plan beyond a simple will.
-- Select women as leaders. There has been an almost five-fold increase in the number of women leaders in family businesses the last decade -- far more than the increases seen in non-family businesses. The trend indicates that increased female leadership of family businesses should continue.
-- Hold themselves and their employees to a higher ethical standard. Since family businesses are family and relationship oriented, they operate more ethically. Family owners have a major influence on their business and values are emphasized in the business. Family orientation seems to translate into more ethical behavior and resulting actions contribute significantly to a family's identity in their communities.
-- Expand on traditional management. There is a misconception that, due to the relational nature of family businesses, they are less professional. In one way this may be true, with only a few businesses having a written strategic plan or formal planning process. This is only one higher level of professional behavior. Despite the lack of formal strategic planning, they use other types of planning tools. Buy-sell agreements, business valuations, boards of directors, formal recruiting, performance appraisals, and benefits administration indicate their professionalism.
-- More unified family values. Family unity and cohesion are critical to family business success and an important goal. Family members that agree on values, attitudes and beliefs exhibit that unity and cohesion. The practice of these values results in increased levels of employee loyalty, commitment and organizational citizenship. Similarity of values between family members in business and their customers also can improve relationships and foster economic stability.
-- Place their trust in family members as key advisers. Overwhelmingly, the business owner's spouse is seen as their most trusted adviser, followed by their accountant, a business peer, parent, lawyer and financial adviser.
A blog version of this article and an opportunity to post comments is available at http://www.wyomingentrepreneur.typepad.com/blog/.
The WSBDC is a partnership of the U.S. Small Business Administration, the Wyoming Business Council and the University of Wyoming. To ask a question, call 1-800-348-5194, e-mail email@example.com or write 1000 E. University Ave., Dept. 3922, Laramie, WY, 82071-3922.