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Counseling for family businesses.

If the phrase "family business" doesn't come to mind when you think of economic development, think again.

Businesses that are owned or controlled by families account for nearly 90 percent of all businesses in the United States. They contribute 64 percent of the U.S. gross domestic product and create 78 percent of new jobs.

Statistics like those suggest that family businesses have a significant impact on the economy--and that providing support for existing family businesses may be just as important to economic development as recruiting new businesses.

The University of Arkansas at Fort Smith, which leads economic development efforts in the Fort Smith region, established the Family Enterprise Center 10 years ago to provide such support. As director of the center for the past seven years, I have developed a strong appreciation for family businesses--and not just for the role they play in our economy.

Here are some of the traits that make family businesses special to UAFS and deserving of special attention by the Family Enterprise Center:

* Family businesses are focused on the long term. They care about future generations, longevity and long-term gains rather than short-term profits.

* Local family businesses are committed to the community. While other kinds of businesses might roll up the tent and move to greener pastures during tough times, family businesses prefer to stay put and weather the storm.

* Family businesses often treat their non-family employees as members of the extended business family. Employees often return the favor through decreased turnover and increased productivity.

* Family businesses tend to support other family businesses in the local economy. They also tend to exercise their philanthropy on a more local level, which is great for everyone, including growing universities.

As for the special challenges that all family businesses face, I have found three major areas of concern:

* Leadership succession. A family business will need to determine who the next generation of leaders will be and prepare them for leadership roles.

* Ownership succession. A family business will need to determine how to provide retirement security for the exiting generation and set up the incoming generation for success without crippling debt or excessive taxation.

* Communication and conflict challenges. In a family business, issues of communication and conflict are magnified because the members mix family and business issues on a daily basis.

At the Family Enterprise Center our approach is to provide a safe and supportive environment for family businesses to explore these issues and potential solutions. We host quarterly breakfast meetings with topical speakers, and our members attend the programs together with other family members as well as key non-family employees. Everyone hears the same thing at the same time, and no one feels singled out or picked on. I like to say we take the discussion away from the family dinner table and bring it to our breakfast table where we can reduce the potential for tension and drama and have a more productive discussion.

In a recent program that proved very popular, a young local business leader shared the compelling story of his family business and the relationship he had with his father before the father's untimely and unexpected death. As he spoke to an audience of multigenerational families sitting together, the young man offered advice for both the older and the younger generations.

He said the most important thing he and his father shared and consistently worked on was mutual respect, and every lesson that transferred between them came about because of that respect. He challenged the younger generation to honor the preceding generation's experience and history, and he challenged the older generation to respect the younger generation's ideas and energy. Both parties have to work on the relationship so that the leadership lessons could transfer.

When someone asked during the Q&A if he ever wondered what his father might do in a particular situation, the young man said that in every case he knew with confidence what his father would have done. He knew because he had watched him and learned from him, and that their strong relationship had made their short time working together formative and meaningful.

Now that is special!

DaveRobertson@UAFS.edu

Dave Robertson is the director of the Family Enterprise Center at the University of Arkansas at Fort Smith.
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Title Annotation:Commentary
Author:Robertson, Dave
Publication:Arkansas Business
Date:Mar 21, 2016
Words:710
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