An owner's perspective about the purpose and who the business serves directly impacts culture, ability to recruit and retain good people, and drive performance - all of which influences customer perceptions, revenue, and profits. In the franchise industry, often times, multi-unit franchisees do not intuitively view themselves as a family business owner. This misperception can and does have an impact on overall business success, sustainability, and value.
Is the purpose of your business to serve you and your ambitions? Or is the purpose of the business to serve and provide opportunity to your community? Is it a mix of both? If the mission and vision of your business includes serving those around you, then it is important to begin thinking like a family business owner.
It may be unlikely that kids will become involved in the near future. But, if there is any possibility in the future, remember the apple often doesn't fall too far from the tree. Involvement of children is not immune to just your familial decision. If any of your key managers/employees have children, you can predict with almost certainty that probably one or more of them will become interested in the business.
Similarly, "family friends" and extended family know a good opportunity when they see one. No matter how close you are in your relationships, all of these scenarios, if not thought through from a family business owner perspective can create awkward distractions. Business and emotional stress turns what once was a highly fulfilling, and perhaps fun endeavor, into a real drag.
Let's take a look at a common scenario:
Twenty years ago Bob and Joe began working within a multi-unit franchisee organization. Learning the business and moving through the ranks together they decided to invest in, and over the course of five years, buy out the previous owner.
Because they had complimentary skills, matched ambition, and were financially invested equally they developed a 50/50 partnership. Through the last twenty years both Bob and Joe have each gotten married and have had kids of their own. As their families have grown, so too has the size of their business, to almost triple, employing over 500 people.
Today, Bob is still as passionate about the business as the day he started. He wants to continue to grow and diversify. Joe on the other hand is finding other interests to occupy his time. He is less passionate and has become less present; yet very much involved in overall business decisions. His oldest daughter (20 years old) and some "friends of the family" are showing interest in the business.
The partners have different opinions and with their varying levels of contribution and passion to the future, this affects the balance of what each believes to be the strategic direction of the business. They do not see eye-to-eye on compensation plans based upon their contributions, or the appropriate way to integrate and develop family member employees in the business. Partner conflict is impacting teamwork and performance.
What seemed to have started out as a fairly simple entrepreneurial franchisee business has evolved into a family-owned business. Consider your scenario and where you are today. Even if you are a sole proprietor, there will be a day that someone shows interest in your business. As soon as someone else is involved, you are now involving their future goals and desires, and they may not align with yours. Therefore, consider the following:
Regardless of DNA, Bob and Joe truly cared about each other and the welfare of each of their strategic partners, managers, employees, and families. Without a unified vision for the future and plan for getting there, they quickly realized there was no telling where the business could end up, especially with constant market, technology, political, and economic changes. As a result, they engaged in a strategic planning initiative, involving their key leaders to develop a unified vision. As a result, they:
By adopting the Family Business golden rule, they were able to find the expertise needed to address some emotionally challenging topics such as each other's vision for the future, passion for the business, motivation, compensation, and vision for eventual exit. As a result, they:
Family and business are an oxymoron. Family is an environment of love and acceptance, where business is an environment of "what have you done for me lately?" Without developing and implementing family governance policies, the family business oxymoron can become the Pandora's box of emotional stress in the family and business. With friend and family member interest in the business increasing, Bob and Joe developed Family Governance Policies including:
Now that you have considered what your future might hold and put some perspective on it. Knowing what Bob and Joe went through earlier, here is an outline of where they are today:
As a result of Bob and Joe's family business ownership enlightenment, they have proactively achieved results to benefit their business. They can now amicably discuss and decide on business direction thanks to a Deadlock Provision. They each have an exit strategy and a plan to develop their financial independence from the business; all while providing opportunity to develop successors. Their roles have been clearly defined and their business vision unified, so no one person is left shouldering the brunt of the work alone. Lastly, they implemented Family Governance Policies, so they can bring in the next generation of leaders and owners in a structured and clearly defined way. These results will help to create long-term stability for the business and lay the groundwork for future growth, so Bob and Joe can enjoy the business they've built.
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