Non-family businesses can learn a lot from family businesses, says Henry Hutcheson, a certified Family Business Advisor and founder of Family Business USA consultancy. "Family businesses outperformed non-family businesses during the boom years leading up to the 2008 recession, and during the 2001 and 2008 recession years," he says, citing a recent Harvard Business Review study.
Hutcheson, author of "Dirty Little Secrets of Family Business," (http://dirtylittlesecretsoffamilybusiness.com), says family businesses were less likely to lay off workers during the lean times, and more likely to maintain their emphasis on socially responsible programs.?But that's just the businesses that survived.
"Many closed their doors," he notes.
With 25 years of business management and family business consulting experience, Hutcheson says he's seen the patterns that can lead to major problems. And they're almost always preventable.
"The factor that enables family businesses to rise to the top is trust: Family members can potentially trust one another far more than non-family members," he says. "But trust can erode - when a family member can't or won't perform at the necessary level; when there's a sense of entitlement; drug abuse; laziness. And that can have serious, business-killing consequences.
"If the business is professionalized, there will be a way to deal with those issues. But too often, safeguards are not in place."
Hutcheson offers five top success strategies for family businesses:
"More than 70 percent of all businesses are family businesses - they account for a significant number of new jobs and a large portion of the GDP," Hutcheson says. "But that's not the only reason they're so important.
"They're motivated by profits, but also by other important considerations: pride in the family name, building something for future generations, philanthropy. For those reasons, they contribute in tremendous ways to social stability. They make our communities better."
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