When I was a pre-teen in high school, I had a second-best friend named Charlie. His mom and dad owned a laundromat—the biggest in town. Charlie was a good guy, and in those early years, we bonded over an amazingly unique shared passion. We both wanted to become Formula One race car drivers. I know! What are the chances?!
Then—boom!—our early teens happened…
…Charlie and I suddenly realized girls and science fiction existed (definitely in that order). Almost overnight, the high-octane, adrenaline-fueled world of Formula One racing lost its luster. I wanted to write. He wanted to draw. By crackling landline phone, we’d talk feverishly about our new dreams (OK, we may have spent some of that time talking about Katherine Tate’s super-hotness and who of us she LIKE-liked).
Then our late teens hit, and something else happened.
Charlie began to talk about his family business. He had big plans for the laundromat. His eyes lit up as he gabbed about jazzier websites, smarter marketing, new locations, and better equipment. His head and heart were full of all the shiny things he’d do when the family business one day became his to run.
Decades whirled by. Ugh.
Today, Charlie drives a fancy car with a witty personalized number plate on it. He manages four new locations, has a few kids (the boy looks just like him), oh, and he draws in his spare time. Over a few too many high school reunions, he’s talked about “heated family discussions,” growing pains, tough transitions, and violently veering visions.
But he did it!
It’s been kind of awkwardly wonderful and wonderfully awkward to watch. But enough about Charlie.
Let’s talk about you.
How to grow your family business
If you’re at the helm of a family business (or are about to be), this one’s for you. This blog post is all about the mental juggling act of picking up where the generation that came before left off to leave a new and uniquely successful mark.
Here’s what we’ll look at:
Table of Contents
A few useful (and comforting) facts about family business in the US
Vin Scully, American sports commentator and touter of quite possibly the most non-risky hairstyle in the history of television, said that statistics “can be used much like an (inebriated person) uses a lamppost: for support, not illumination.”
But … here’s a radical idea for ya:
Behold! some statistics about family businesses to support and illuminate your journey:
- There were approximately 5.5 million family businesses in the US in 2011, according to the Family Owned Business Institute. That figure had more than quadrupled to over 24 million by 2021.
- Looking at the US workforce as a whole, in 2023, a full 62% of workers are employed by family businesses. Around 64% of US GDP—nearly two-thirds!—comes from family businesses.
So first thing’s first: If you feel like you’re way out on a weirdly shaped limb picking up and running with your family business, know that you’re not. True, there’s a surprising lack of conversation in mainstream media about the peculiar challenges of a family-run enterprise—especially multigenerational businesses for some reason—but you’ll find solid and reliable resources if you know where to look.
Case in point: Slap a bookmark on Deloitte’s excellent eight-part series on pivotal moments for family enterprises.
And—foreshadowing, here—there’s more where that came from!
But back to the stats, speaking of multi-generational family businesses:
- Around about 40% of family-owned businesses transition to a second generation, according to some admittedly older 2010 research cited by Cornell’s SC Johnson College of Business.
- The rags to riches myth about a family business rising and falling in three generations is just that: a myth. It’s all a bit convoluted; you can check out this Harvard Business Review article for the full scoop, but long story short, there’s absolutely no statistical basis to the old chestnut that the great majority of family businesses fail in generation three.
A quick summation then:
The bottom line for you if you’re taking on a second-generation family business is that the future is bright, and Vin Scully (if that is indeed his real name) can go suck a big juicy lemon. If you work hardly, think smartly, play nicely and talk goodly, there’s an excellent chance your offspring will be taking the reins of a thriving family business a few decades down the temporal line.
A three-part strategy for helping your family business thrive:
Hopefully, by now, you’re broadly convinced that you have great places to go, customers to woo, and plans to hatch. So, let’s dive a bit deeper now and look at how you can make your family business grow.
Now, of course, you’ll need a business plan and all that sensible business collateral to make your family business thrive. If you’re looking for that, the US Chamber of Commerce is brimming with useful resources, but at Ruby, we’d like to look at that big question from a communication and mindset standpoint. Because, well, that’s what we do!
We believe there are three important ways you can think and speak to take a family business and make it grow.
1. Break some bread.
AKA re-engage with your customer base
The top card on the importance pile—as always—is your customers. As you take the reins of a new family business you gain an important opportunity to re-engage with your customer base.
Show your customers how you see the world.
“Tell your story.” It all sounds a bit soft and fuzzy at first glance, doesn’t it? But as anyone who has breathlessly revealed their undying desire to conquer the world of Formula One racing by crackling landline phone at 11 pm on a weeknight will tell you … that kind of candor is hard!
If you need a nudge in the right direction, take a glance through Indeed’s great resource on how to draft a captivating story. Or you can delve through Ruby’s extensive collection of customer stories as a starting point to crafting your own. Take the time to develop a strong statement about where your family business sprang from and where you plan to lead it next. Then share that story through your website and marketing materials.
And let’s be real here; You have a huge home-town advantage. Family businesses instantly evoke feelings of connection and authenticity. Showing how you see the world taps into that vibe. Oh, and a quick pro tip: Keep those stories fresh and invigorated! Invite customers to see who you are, how your team is growing, and what makes you collectively tick right now.
Listen to your customer’s stories.
The yin to the yang of any great conversation is listening. Take the time (and actively offer the opportunities) to tune in to how your customers see your biz, what they want from you, and where they want to meet you to do business.
This is an art form unto itself. Fortunately, we have the perfect resource to get you started with our article, Five ways to level up your listening skills.
Focus on their problems.
An equally important way to break bread anew with your customer base is to kick off a practical dialog about their problems. This is crucial if you offer any kind of customer support. The trick here is to avoid coming down with a serious case of assumptionitis.
Yep, you may have carried out a customer solution workshop a few years back and feel you know all about their pain points and how you can fix them. But as you lean into setting the direction for your family business, now is the perfect time to revisit and re-test all those assumptions. After all, people change!
We can help you get started on that journey with our blog post, Are you really solving your customers’ problems?
2. Make some omelets.
AKA shake things up a ‘lil
A wise aunt with a pet Pomeranian once said, “You can’t make an omelet without breaking eggs.” Or, to put it another way, it might be high time to shake things up a little.
Most family businesses are stable. The mean age of family control (i.e., senior management) in a family business is just over 60 years. That’s long! Stability isn’t a bad thing of itself, of course, but as Score pointed out in this March 2023 article, a predictable and stable business trajectory can have its downsides.
Boiling these kinds of problems down to a thick soupy summarizing substrate, a typical family business will usually encounter three main stability-related problems:
Inertia
Who needs handbooks? The company studiously avoids formalizing procedures and policy frameworks. The result? The company grinds to a halt, effectively locked in corporate time.
Fixing this one is simple. Write those policies! Find ways to better combine your data to introduce a more optimized structure to work.
Myopia
Why hire externally? Ultimately, senior positions have a concentration of like-minded people who argue across the dinner table. A lack of external insight can eventually lead to short-sighted tunnel vision.
How to regain that sharp, forward-looking focus? Bring in new brains and fresh ideas. And remember, Ruby offers versatile ways to make that happen with live virtual receptionists and customer support.
Poinsettia
OK, that heading was just a test to see if you’re paying attention. The third kind of challenge is burnout. The family and the work become one, and it gradually becomes impossible to switch off.
At all costs, set boundaries.
Stand in front of the mirror and repeat this mantra at least seventeen times per day: “You are not your business.”
3. Share some spicy secret recipes.
AKA build an honest and authentic voice
Finally, let’s circle things right back around to you. And by “you,” I don’t mean your business or your immediate team. I mean you—the dashing human with great dress sense whose inquisitive eyeballs are scanning this page right now.
Forget how your family business does things for a moment. Let’s tackle a few personal questions. How do you get things done? What do you care about? Where do you want to go next?
“Find your voice.” It’s a phrase that’s perhaps a bit overused these days, but if you trace the mooshy sentiment right back to the effervescing wellspring from whence it came (that’s right, whence!), finding your voice is about something truly potent and transformative.
It’s about authenticity.
At a time in history when our conversations are increasingly guard railed by bots and curated by the bits and bytes of a billion busy algorithms of every conceivable shape and purpose …
… that one central question of truth remains as important now as it ever was …
… What do you have to say?
There are two main ways you can think about finding that voice of yours as the new guiding light for your family business.
Little voice…
We all know the little things count. Done right, small but meaningful ways of building a connection can add up to enormously important things, like loyalty and trust … heck, even love! (But that’s a subject for another blog.) The point is, sometimes it’s the little things, you know?
It’s smart to spend time revisiting how your business talks to customers every … single … day—all those practical negotiations that add up to how your business is seen—from how you leave voice mails to how you answer the phone.
Big voice!
Then there’s the big voice. You know the deal; I’m talking here about the grand statements that define the vision and direction of your company.
Spend time crafting big, bold statements about where you are going, what you will do, and what you won’t do. Start with a statement of a punchy paragraph. Distill that down to a pithy sentence. Then purify it further, if you can, to the simplest nugget of purpose you can express in one phrase or one word even. Quick! Slap that truth on your website’s home page. Open with it when you meet customers. Print it on promotional frisbees. OK, avoid airborne rotational promotional merch, but the point is that there is nothing trite or stale about a message that you truly, genuinely mean.
The key here is to arrive at this statement yourself. Sure, ring in a copywriter or a marketer to fancy it around the edges for you if it needs a polish, but make the heart of the thing yours and yours alone.
Follow your passion—and make it your own.
A reunion or two ago, I asked Charlie if he felt he’d made the right decision to pour his heart and soul into his family business.
He didn’t need to think about it too long.
“Oh sure,” he said over canned 80’s reunion muzak. “There were good days and bad days, you know.” His eyes drifted across the class of ’92 as he sipped from a red plastic cup filled with a substance the reunion organizers claimed was beer.
“At the end of the day, I took something good and made it better.”
You can’t argue with that.
We at Ruby hope that at some far-flung reunion, you can look back and say the same thing. And if you need our help to get there…
as always…
