Week 3 Flashcards
Competitive advantage
If properly managed, the family component can and will lead to a significant competitive advantage!
Loyalty
More committed adn passionate about the business and its success
Family members are willing to go the extra mile
Come in early, stay late, run errands and fill in for other
Legacy
Brings a sense of accomplishment and a string sense of pride
Desire to continue what their father, grandfather or etx built
Focus on stewardship instead of wealth maximization Business-first vs. family-first
Access to labor
Family members are flexible (come in early, stay late)
Family members are more loyal, committed and passionate about the business.
Key employees
Nonfamily employees appreciate and enjoy the unique work environment created by a family business
• Tends to be less formal, more hands on, and more personable
• Often treated like extended family
Access to capital
- Option to turn to family members for capital instead of going to the bank
- Useful when bank will not lend to the company (overleveraged)
- Family members are usually much more flexible than the bank (terms – interest, timeframe, no collateral)
Patience & long-term thinking
• Family businesses tend to be less driven by short-term financial results
• They are prepared to sacrifice short-term gains for the achievement of their longer-term
goals
• Long-term thinking has allowed many family businesses to survive times of economic crisis
or downturn
Values
Family business owners have the opportunity to teach
and pass along their business and personal values
• Family members take pride in upholding these values
• Integrate them into their day to day work and personal
activities
• These family values transcend into the business and
creates a strong set of organizational values
Career
Opportunities
• Family business owners pride themselves with being
able to provide family with career opportunities in the
business
• Rare to have the opportunity to own a successful
company
• The family business can be a great training ground for family members who want to pursue other career
Relationships
• Working with family members to pursue common
business goals can be very rewarding
• Years of bonding among family members can create a strong sense of belonging
• Managing these relationships will go a long way in
ensuring the long-term success of the business and the family
• This can make or break the family business
Financial Rewards
•Successful family businesses can provide financial rewards to both active and non-active family
members
•Common for family businesses to compensate family members more than they could obtain
elsewhere
•One of the privileges of being family
Succession
- Along with career opportunities, the family business also offers the opportunity to be an owner
- Can be extremely motivating and rewarding
Community & Philanthropy
- Most family businesses are quite active in their communities
- These communities benefit from both:
- Family members as volunteers and supporters
- Family business through financial support and employment opportunities
- This commitment to the community tends to permeate the generations and provide family members with the opportunity and rewards that stem from this ongoing community support
