There are many misconceptions regarding family businesses. We tend to think of them all as small companies that are struggling to become large, public businesses. But this is not necessarily true. Many family-owned businesses are indeed small (when compared to the global market), but they are not all trying to go public — and they are certainly not all struggling.
It is true, however, that many public businesses today started as family businesses. Some of the biggest and most successful companies in the US began as small family businesses. Some of the world’s largest companies still operate as family businesses today.
What do family businesses do differently?
One of the critical differences between family-owned businesses and other companies is that family businesses are not primarily focused on turning a profit. Instead, family businesses generally have a broader vision. They are concerned about their identities, reputations, and the roles they play in their communities. They are also built around creating a legacy for future family members.
This set of values shared by most family businesses is beneficial to all involved, including customers, suppliers, and the surrounding community. These values set a foundation for long-term thinking — the kind that is required to create a lasting organization. Short-term profits are nice, but they are never the focus or the goal. Every decision must be made with a mind for the present and future of the business.
What can family businesses teach all business owners and entrepreneurs?
Even if you don’t own a family business, there is still much you can learn from family business owners. Start thinking about your company’s long-term health and legacy. Create a mission statement that revolves around the future of your company, as well as its role for future generations. If you focus only on the present, you could be setting yourself up for a bleak future. Keeping the big picture in mind will help you to make decisions that are beneficial to all of your organization’s stakeholders, including yourself.
Family businesses can also teach us a great deal about the importance of innovation. As time goes by, family businesses are often forced to adapt to the changing world. Sometimes that means they diversify, and sometimes they start new businesses and close old ones. But they always make longterm, value-based decisions rather than short-term, money-based decisions, which is something that every business owner could benefit from.