When a business runs down generations, every generation learns from previous mistakes. Learning from mistakes eventually leads to better results further in life. If they don’t, the business eventually shuts down.
Let’s take a look at some statistics showing the percentage of businesses that run down till the fourth generation.
Only 3% of businesses make it till the fourth generation and beyond. This happens due to a lack of planning and learning. Let’s now move further to the things I learned and implemented throughout my journey.
1. You Become Aware Of Your Strengths And Weaknesses
Who knows your strengths and weaknesses better than your family? When you grow up in a family of entrepreneurs, they help you enhance your strengths. On the flip side, they identify the right ways of dealing with the weak points.
For example, if you efficiently handle a team, you know you have good leadership skills. But when it comes to money management, you are the last person your family will prefer. Poor money management skills are the weak point the other members will help you get better at. This helps you in avoiding those mistakes later on in your ventures.
A person with no family business background learns everything from scratch along his way. He has to go through numerous steps for launching a venture. Along his journey, he makes mistakes to identify the areas where he lacks and it eventually takes him time for full awareness.
2. The Importance Of A Positive Employee Environment
There are two types of entrepreneurs:
- The ones who know your business relies entirely upon your employees’ efforts and keeping them content is of utmost importance
- The second are the ones who expect them to give their fullest at a bare minimum salary with no extra benefits
The second category often leads to dissatisfied employees which eventually affects business productivity. A positive employee environment is important in every type of business.
Growing up in a family of entrepreneurs, one thing that I noticed was the little effort taken towards the employees. Simply making them feel special on their birthdays, giving them certain incentives, bonuses, etc. can develop a happy and lasting relationship.
3. Taking Up Advice Early On In My Business
There are two scenarios that a business could be in:
- Firstly, it starts on its own and learns along the way. Making mistakes, losing money, and sometimes starting over from scratch.
- Secondly, it takes up advice from experts and follows it to avoid losses from the very beginning
For example, Laravel Development company, focussing on web development takes and implements experts’ advice for the smooth functioning of its business.
Gone are the days when entrepreneurs took impulsive decisions. Taking calculated risks is prioritized to avoid regrettable scenarios. The problem with the first approach is that you might get caught up in a rut and never get through with it. Asset protection is a crucial aspect that most businesses rarely pay attention to. This leads to the permanent shutdown of the business along with the burden of loans.
After observing a bunch of impulsive decision-makers, I realized the importance of taking up advice early on. This helped me prevent losses in the short as well as long run.
4. You Must Conduct Thorough Market Research
Early businessmen might prefer the approach of going with the flow. But with a drastic increase in the competition, it’s crucial to be aware of the market. It’s significant to understand why the competing businesses are successful or failing miserably. This will help you stay ahead of your competition. Being fully aware of the current trends and industry statistics will help you develop a well-laid plan.
For example, a router table manufacturer can benefit from conducting market research by understanding the competitors’ products. Based on the understanding, he can end up with a new product line focussed on the consumers’ needs. The goal is to provide your customers with a product that solves the problems in the most convenient manner.
Once you create a plan, make sure you keep modifying the plan when the need appears.
Let’s now take a look at the percentage of family businesses with a succession plan.
This is a clear indication of why most businesses shut down early on.
5. You Get Better At Resolving Conflicts
Every time a business-related conflict occurs between family members, they always find a way to get past it. In a family business, you can’t seem to fire the members which takes you to the only viable option of resolving the conflict. You learn how to consider other members’ opinions and come across a mutual agreement on the issue. This gives you the lesson of patiently resolving conflicts, the importance of developing your people skills, and the value of compromise.
The reason behind unsuccessful family businesses can somehow be a lack of patience during a disagreement. On the flip side, if you are good at it, you can successfully run the business over a good course.
One thing that I loved about my family business was the conflicts always led to a rational mutual decision. This teaches you the importance of retaining individuals in your business despite issues. You can’t keep firing the people working in your organization and still expect a good image. Furthermore, the process of hiring and training new individuals is time-consuming and expensive.
6. You Learn To Accept Failures Early In Your Life
Growing up in a family of entrepreneurs, I observed the ups and downs of a business environment. It helps you realize the importance of having a backup plan. Failures are inevitable due to the constantly changing environment. One day your idea is a big success while on the other someone comes up with a better alternative. Being prepared for failures helps you quickly recover from them. Most family businesses get through the failures and happily succeed, thereby creating opportunities for other people.
With time, the number of family businesses is drastically increasing. Take a look at the below statistic showing how people in the US are employed.
7. The Right Balance Between Personal And Professional Life
Unlike jobs, an entrepreneur doesn’t get free after a certain time in a day. He is always caught up with his business calls and meetings. If not, he is somehow planning for something. Being in a family of entrepreneurs I understood the significance of balance between your personal and professional life. Taking time out for your family is crucial despite the hectic schedules. Furthermore, these little breaks help you in concentrating better.
Keep working on the areas where you lack and make better decisions. Make sure you treat your employees right and encourage them to participate in the decision-making process. In the end, having a strong vision and a well-laid plan will help you run your business smoothly.