Keeping a family business running smoothly takes commitment, dedication and effort. Family dynamics, the marketplace and government policy all shape their operations. NATSO sat down with Andrew Keyt, executive director of the Family Business Center of Loyola University in Chicago and president of the Family Business Network –USA, to discuss what 2011willmean to family businesses.
Q. What are the greatest opportunities for family businesses in 2011?
A. The strength of family business is that they can take a longer-term approach than public companies can. They can make investments in 2011 that are going to pay off further down the line. Public companies have to have returns on their investment much more quickly than family businesses do, so they are going to be able to find the things public companies can’t do and fill those niches. For example, I work with a family in the construction industry. With the economic downturn a lot of their competitors had to liquidate. This family has a history of a conservative approach and they were in a good position to purchase the equipment that businesses were liquidating. They were seizing the opportunity the market presented to them. That long-term approach and steady dedication to their niche is the strength of family businesses.
Q. What are the greatest challenges?
A. Given the political situation, there is uncertainty regarding the tax issues and particularly the estate tax. A lot of family businesses are tentative right now because they don’t know what is exactly happening. They are holding back and being more conservative. The challenge is how do we keep the family unified when there is uncertainty in the market and uncertainty in the government.
Q. How do you keep that unity?
A. The first piece is developing the family’s capacity to recognize the communication challenges they face as family members. In developing that sense of unity in a family, you have to build a sense of connection as family members. You have to communicate and work on your issues. You also have to have a sense of pride and an emotional connection to the business. A lot of families will hold regular family meetings to build those relationships. They will spend time in a social setting together outside of the business not talking about the business. They are intentional about these things and don’t just leave these things to chance.
Q. What is the best advice you can give to a family business?
A. When you start talking about “me” instead of “we” in a family business, you get in trouble. When you start advocating for individual interests over the greater good of the family in the business, you start getting cracks in the armor. That isn’t to say that you shouldn’t have conversations about the individual effects of business and family decisions, but you do need to say that you’re in it together and recognize the greater good of the organizations.
Q. What are the keys to success?
A. Being successful as a family business is not about having all the answers. It is about putting the processes of communication and governance in place so you can come up with the answers to the questions you may face over time. That includes having regular family meetings to address issues, having a board of directors or advisors that can help you answer the business questions you will face, and having a clear direction of where you’re trying to go and what you’re trying to do.
This article originally ran in Stop Watch magazine. Stop Watch provides in-depth content to assist NATSO members in improving their travel plaza business operations and provides context on trends and news affecting the industry.
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