Briefing – September 12, 2019:
Professional Hair Labs started out as a small, family-owned business. Now they are earning eight figures in revenue. CEO Ryan Margolin credits the company’s people-first motto with their success. Margolin’s advice to other business leaders is simple: be a thought leader and don’t be afraid to make big changes.
A 2018 report from the Deloitte Family Business Center shows that many family businesses lack a fully developed digital strategy, with 40 percent of surveyed respondents saying either they didn’t have one or that they were still developing it. Smart Company sits down with family businesses to discuss how generations can come together to bridge the digital-marketing divide in family business.
The Twin Cities Pioneer Press interviewed several family businesses at the Minnesota State Fair to discuss what it’s like to serve customers at the largest state fair in the US (ranked by average daily attendance). The Minnesota State Fair is a rush for all vendors, but after years of working the fair these family businesses say they enjoy the adrenaline of the high-paced environment.
One of the biggest challenges in transition of ownership in family business is the breakdown of communication across generations. The Money Show’s Bruce Whitfield interviewed small business expert Pavlo Phitidis to discuss negotiating with parents and responding to younger generations.
Since they were toddlers brothers Nigel and Shane Mushambi shared a passion for baking. Now at the ages of 12 and 13 respectively, Nigel and Shane own their own business, 2 Bros. In The Kitchen. The Mushambi brothers are role models in their Texas community and beyond for young people in business who want to follow their dreams and give back to their communities.
Briefing – August 1, 2019:
Leaving one’s career to join the family business can be a big adjustment. After Sugandha Mahajan and her sister quit their jobs in law and investment banking to join the family business, they experienced several transitions. Now they reflect on what it means to be a next-generation entrepreneur and present the 10 commandments of what they wish they knew. Some of their tips – go with the flow rather than swimming upstream and always have an exit strategy.
Managing under-performers can be one of the most challenging aspects of running a family business, particularly if those employees are relatives. But even though managing a family member is inherently different from managing an unrelated employee, there are still many ways to hold everyone accountable and enhance performances. Liz Kislik of the Harvard Business Review offers advice on this subject. Kislik suggests shifting the employee’s role or responsibilities, have a neutral third party offer feedback, or reassign the family member to a non-family leader.
Brothers Mike, Bob, and John Cain, owners of Cain Tubular Products in Illinois, recently received an Honoree Award from NASA for their contributions to the J2X rocket engine program. Now these third-generation business owners reflect on their family business history of assisting NASA. Starting in the 1960s, Cain Tubular Products became a subcontractor to a company working on the Apollo space mission; they created heat exchanger coils that were used in command modules. Over 50 years later the Cain family continues to take pride in their contributions to the space program.
According to an EY global family survey, women make up at least 40 percent of the workforce in 80 countries, and yet they remain greatly underrepresented in leadership roles. But studies show family businesses are ahead of the curve in addressing the gender gap in management and leadership. When the 525 largest family businesses were surveyed, it was found that top management teams are on average 22 percent women (compared to 13 percent globally); and board membership is 16 percent women (compared to 13 percent globally). EY’s Carrie Hall writes: “At a time when gender parity remains elusive at all levels of business management, family firms are especially compelling options for women who aspire to lead.”
Perhaps the most difficult question family business founders struggle with is whether they want to sell the business or transfer it to the next generation. There are many benefits to selling, such as greater cash in retirement to ensure security and pursue dreams. Transferring the business, on the other hand, can allow for establishing a legacy and creating opportunities for the next generation. Jacob Engel writes in Forbes how the decision to sell or transfer the family business may not be so black and white; a founder can find investors, create options for buyback, or enter into other agreements that allow for the question of ownership to be revisited.