Lexington, KY - Recent statistics show that there are more than 24 million family businesses in the United States. The Small Business Administration notes that between 60 percent and 80 percent of all new jobs created can be attributed to small business, the most typical family business.
According to a February 2011 report by the U.S. Small Business Administration, small businesses in Kentucky "account for a significant share of the state's economic production and hiring." Small firms, many of them family owned, make up 96.7 percent of the state's employers.
Many small businesses are created from an entrepreneurial idea or the family-centered spirit of getting ahead that is part of the American dream. However, anyone wanting to start a small business must also recognize that family businesses present a unique set of challenges as well as rewards.
There are many books that share the experiences of family-business owners. Here are some sure to open discussion around the family kitchen table.
Succeeding Generation: Realizing the Dream of Families in Business
By Ivan Lansberg (Harvard Business School Press)
Widely praised as a landmark work on the topic of family succession, this book is a detailed look at the complexities of family business governance. Ivan Lansberg teaches at the Kellogg School of Management at Northwestern University and also has a worldwide reputation for his consulting work on complex family businesses.
This is a scholarly and detailed resource on succession that draws extensively on his work as a consultant. It relates a wide array of scenarios for succession in family businesses and follows through with well-chosen examples.
Stakeholders in a family business must have a shared dream or vision for the company, Lansberg says. As organizations change through the generations, this shared dream must take on new dimensions and be communicated in new ways.
"Family enterprises are highly personal systems," Lansberg states. "Too often, elaborate strategic and succession plans go unrealized because these deeper psychological factors have not been taken into consideration."
The shared dream is the most important factor for family-business succession. As one generation succeeds the past one in leading the business, there is "an ideal opportunity to reformulate the company's direction and renew its energies."
Succession is always driven by a biological clock, Lansberg says. For families who built successful businesses in the last half-century, succession planning is now an urgent reality.
Keep the Family Baggage Out of the Family Business: Avoiding the Seven Deadly Sins That Destroy Family Business
By Quentin J. Fleming (Fireside)
A family business can be part of the American dream, but too often it can turn into a nightmare.
"Working in a business with your family is a dangerous proposition - both for the business and for family relationships," says family business consultant Quentin Fleming. "The only way to increase the survival rate is to deal with the problem head on."
Fleming identifies "seven deadly sins" responsible for the failure of family enterprises. He provides an experienced guide's map to the minefield of issues unique to family business. Title chapters define the issues succinctly: "They May Have Become Adults, but They'll Always be My Children," "Maybe It Will Go Away If We Ignore It," and "Father Knows Best?" Each "sin" is carefully examined with an eye to warding off such a trespass and a warning of the consequences of failure.
The author emphasizes that the dynamics of family business are truly different, in part because of the baggage each family member brings. If you are considering starting a family business, this book is a good start to understanding - and addressing - the unique problems that often come with it.
Family Inc.: How to Manage Parents, Siblings, Spouses, Children and In-Laws in the Family Business
By Laura and Larry Colin (Career Press)
Studies show that less than one-third of family-owned businesses make it to the second generation. Only 10 percent make it to the third. Managing the family can be as difficult and as important as managing the family business.
If two employees don't get along at a large corporation, it generally doesn't affect the stock price; if two siblings are fighting, it can have a major impact on the family business. The authors draw on their extensive (and at times painful) backgrounds with their own family businesses to provide a clever and insightful look at family business.
The book chapters are a playlist of characters involved in the drama of family business. "Dad the Decider," "The Hard-Charging Son," and "Mom the CFO" are among the potential actors, with others waiting in the wings. The often emotionally charged dramas among these players make it a challenge to transfer a business from one generation to the next.
Readers will nod their heads in agreement at the accuracy as the authors zero in on these various family business players. While your family business may be unique, they argue, your problems are not. Reading this book can be a first step to acting now to managing a family business satisfactorily.