The transition from one generation to the next is one of the most distressing processes a company can go through. Facts from research say only 13% of family businesses in India survive, and only 4% organizations survive to the 4th generation.
Since the early 1980s, academics have been studying family businesses as a unique and significant category of industry. Today, family-owned companies are regarded as essential and active players in the global economy.
In their long-term focus, devotion to quality (which is frequently linked with the family name), and care and concern for employees, family owned companies may have certain benefits over other commercial organizations. However, because of the intersection of family and commercial concerns, family firms confront a unique set of management challenges.
ISSUES IN FAMILY MANAGED BUSINESS
A family managed business may be defined as the interplay of two distinct but interconnected systems—the business and the family—with unclear borders and varied regulations. Family managed companies can involve a variety of family members in various business positions, such as spouses and wives, parents and children, extended families, and several generations acting as stakeholders, board members, working partners, advisers, and workers.
Some of the challenges the Family Managed business faces are as follows:
- Stagnant Business
- Low Margins
- Person Driven Approach
- Resistance to change
KEY POINTERS TO CONSIDER WHEN BUILDING A FAMILY BUSINESS
- Family managed companies must be highly oriented towards system driven approach and must follow a methodical strategy
- Effective decision-making is essential
- Balancing family members’ engagement and performance management in accordance with company demands
- Need for a robust governance framework cannot be undermined, as well as succession planning
- Adopting smart technology and adapting to the changing times is essential for growth in these different times
Team Faber Infinite has been assisting over more than 50 family-owned businesses across industries and geographies.
By supporting Family Managed Businesses across the world, Team Faber Infinite Consulting has been able to deliver phenomenal results. With our skills and expertise, Team Faber has been able to assist family managed businesses and help them overcome their challenges with best possible solutions.
Team Faber Infinite has assisted family managed businesses across sectors, with a few to mention below;
- FIBC / Technical Textile
- Pharmaceuticals & Life sciences
- Plastics and Packaging
- Consumer Goods and many more
Parameters improved by Faber Infinite in family managed businesses are as follows:
- Productivity & Production improvement
- Cost optimization – Profitability Improvement
- Reduction in manpower cost
- Throughput improvement and many more.
To succeed, a family managed business must keep lines of communication open, make use of strategic planning tools, proven operational excellence methods and engage the assistance of outside advisors as needed.
Reach out team Faber Infinite Consulting for further details on how our expert team can add value to your family managed business.
Written and Compiled By Faber Mayuri and Faber Khushi