Many people dream of building a generational business that their future generations can benefit from. Walmart, Samsung, Nike and many other giants in the market started as family businesses and the data reveals that 30 percent of all businesses with more than a billion dollars in sales are family-run. Let us explore how you can create a successful generational business.
Start Small and Be Willing To Sacrifice
Many successful businesses that you see today started as small scale businesses hundreds of years ago. It took time, effort, commitment and sincerity for them to grow. Do not expect to make millions within a few years of starting your business. In fact, it is quite possible that by the time your business begins to prosper, you will no longer be alive and your children are going to benefit, because that is how most generational businesses work. If you are really worried about your future generations and you want to leave behind a legacy for them to continue and benefit from, then you must be willing to sacrifice during your life time.
Communicate Regularly and Divide Work
In a family-run business, communication and participation are extremely important. All the family members must remain involved in the business matters and they should have a clear understanding of their role. While some members may not be involved actively and only participate as board members or receive dividends, they should still know everything about the business. Make business plans together and discuss with your family members what their expectations are and how much time and effort they are willing to dedicate for the business.
Business consulting experts suggest that all the family members should meet and discuss everything at least once every year so that everyone is aware of how the business is performing and what they can do to improve it. While it is necessary to keep everyone involved, it is also necessary to have a clear understanding of who the decision makers are. All members cannot be and should not be involved in executing the plan and making crucial decisions.
Teach Your Children
Creating a generational business is all about keeping your children involved and preparing them to take the lead in the future. If you fail to teach your children the necessary skills, your business is most likely to collapse within a few years after your demise. Make all the younger family members understand the business fundamentals at an early age and keep them involved in decision making. Sometimes, you may also let them make a few decisions so that it boosts their confidence. According to a survey, learning about the family and board governance is the most important thing for children who are expected to run a generational business later in their life. Entrepreneurship, leadership, and matters of succession are the other important aspects that they should be taught.
Conclusion
These are a few basic strategies that you should keep in mind when trying to set up a family business that you wish to last for centuries after your demise. Creating a generational business is one of the best ways to make your future generations remember you and benefit from the legacy that you leave behind today.