The Family Business: From Main Street to Wall Street

family business owners

Photo (CC) by Dana, on Flickr

Chances are you do business with with one, and probably many more, family businesses.

Family businesses surround us. Family businesses form an integral part of our economy. We find them in all shapes and sizes, from WalMart and Ford to your main street stores and even some operating out of the garage or off the dining room table.

Family businesses represent a unique intersection of the business system with the family system. Family businesses have additional opportunities and resources because of the family system of which they are a part. Intermingling of time and resources has been found to be used in the business just as such resources, at times, find their way over to the family system from the business.

Yet with such potential benefits, family businesses are also navigating family dynamics and relationships that a traditional business owner never encounters.

Understanding the family business with its merger of the both the family and business systems, along with a two-way relationship with the community, has been the the mission of the Family Business Research team and its National Family Business Survey. The team is now collecting data providing 20 years of information from its national panel of businesses.

From the development of the Sustainable Family Business Theory in 1999, the team has focused on understanding the factors of success along with how communities and family businesses work together. Resource exchange, disaster preparedness and response, and family tensions have all been examined.

How such family businesses give back to the community has been highlighted earlier. Recently a highlights newsletter has been distributed and a complete bibliography for the group can be found here.

Family businesses are key economic contributors. They not only feed the family that runs them but expands and enhances the local economy. Get to know your family business owners. See how your community and these businesses can work more closely together. 

Family Businesses Give Back to Communities

shopowner

Photo (CC) by Katie, on Flickr

Information provided by Diane Masuo, College of Tropical Agriculture and Human Resources, University of Hawaii at Manoa

I have the opportunity to work with colleagues from land grant colleges and universities across the country. Part of what I am involved with is the study of family businesses. Diane, one of our team members, recently examined how family businesses support the communities where they are located.

Family businesses are more prevalent than most people think. Family businesses come in all shapes and sizes from the main streets stores in our town to the major ones such as WalMart, Cargill, Ford and Mars.

Family businesses, in total, represent one-third of the S & P 500 index, and comprising nearly 10 million firms in total.

Family businesses are the retail, small manufacturers, and service businesses we see and use every day. Our economy would quickly come to a halt if we didn’t have family businesses in our world.

Yet to think that they only provide goods and services underestimates their importance in our communities. Diane explored what “socially responsible practices and economic support” they also provide. She noted:
– Male business owners were more likely than female business owners to:
—- Provide financial and technical assistance in community development and planning
—- Made monetary donations to schools.
– Non-service sector businesses were more likely to be personally involved through holding elected offices and leading civic groups.

Business owners were found to give back to their communities. It didn’t matter if they were home-based businesses or not home-based business. Length of time living in the community seems to play a part in the willingness to give back.

Length of time in business directly influenced what type of resources were given. In the earlier years it was more likely to be monetary donations with leadership positions and technical assistance added to the giving as the business matured.

Diane’s recently released report can be found at: www2.hawaii.edu/~masuo/CSR_Natl_070615.pdf

So as you think about your community’s family businesses, remember the unseen resources of time and money they provide along with jobs, taxes, and needed goods and services we depend on.

Hiring Your Own Children

You need some summer help and you have a teen who is looking for work! Perfect. You’ll hire your daughter or son and both problems are solved. While in many cases that can be a very workable solution there are other instances where hiring your own children can create more headaches than you ever imagined. As with most things in your business the key to success is careful planning. Here are a few tips for success:

Have a job description. This is important for any employee but will be especially important when hiring family members. Describe the tasks that are expected, the work hours and conditions.

Have an employee policy manual. This doesn’t have to be fancy but it should include the tasks that need to be completed along with clear instructions on procedures and work quality. Include general policies related to taking time off, and who to notify in the event of illness. The policy manual should also be clear about any training that is required, what equipment can (and can not) be used and when, and the safety plan in case of an emergency.

Have an letter of employment signed by both parties. This document should spell out the wage that is being paid, when and where checks can be collected, how hours are calculated, the policy on rest breaks and meal breaks, the starting date and the terms of employment.

It may seem a little silly to go through all of this with someone that you know as well as you know your own child but experience makes it clear that all of this process really helps to create a professional employee/employer relationship. By emphasizing the professional nature of this relationship you can help minimize the temptation to drag family baggage into the work environment. It will also help your teen set some important expectations about future jobs where the boss will not be “Mom” or “Dad”.


 

Tips on How to Motivate Employees

  • Organize jobs so that an individual can see the job through start to finish
  • Let employees interact with other employees, customers, and supervisors
  • Organize jobs into clusters that require a variety of skills
  • Allow some freedom for employees to make decisions in how to get a job done
  • Provide frequent feedback with clear standards about how success is measured
  • Provide opportunities for growth