Secrets To Sustaining Family Businesses: 10 Factors to Put in Place

Many family businesses have gone down due to the fact that certain measures were never put in place to ensure sustainability.

A majority of Kenyan businesses are family-owned and when these sole owners die, the battle of supremacy takes a toll on the businesses to the point of fallouts, for instance, the alleged battle for Tuskys Supermarket that led to its closure.

Sustaining a family business can be challenging and a tough nut to crack but the willingness to make it work and keep it running saves the day in most instances.

There are several key secrets that can help prevent family-owned businesses from falling apart and maintaining the family legacy and passing it down to generations.

Here are ten crucial factors to consider:

1. Clear Governance Structure

 Establish a clear governance structure that outlines the roles and responsibilities of family members within the business.

This can help avoid conflicts and ensure everyone understands their role.

2. Professional Management

 Consider hiring professional managers who are not family members to run the business.

 This can bring in outside expertise and reduce potential conflicts among family members.

3. Open Communication

 Foster open and transparent communication among family members.

 Encourage regular family meetings to discuss both business and personal matters.

4. Succession Planning

 Develop a comprehensive succession plan that outlines how leadership and ownership will transition from one generation to the next.

 Start planning early to ensure a smooth transition.

5. Training and Development

 Invest in the training and development of family members involved in the business.

 Ensure they have the necessary skills and knowledge to contribute effectively.

6. Separate Business and Family Finances

 Keep business and personal finances separate.

 Avoid using company resources for personal expenses, and maintain a clear distinction between family wealth and business assets.

7. Conflict Resolution

 Establish a process for resolving conflicts within the family and the business.

Consider using mediation or outside advisors to help with conflict resolution if necessary.

8. Diversification

 Avoid overdependence on a single business or industry.

 Diversify your investments and explore opportunities in different sectors to reduce risk.

9. Adaptability

Stay open to change and adapt to market trends.

Family businesses that are resistant to change may struggle to stay competitive.

10. Long-Term Vision

 Develop a long-term vision and strategic plan for the business.

Focus on sustainability and growth over generations rather than short-term gains.

Remember that each family business is unique, and what works for one may not work for another.

It's important to assess your family's specific situation and tailor your approach accordingly.

Seeking guidance from experts in family business management or consulting with other successful family businesses can also be valuable in sustaining your family business over the long term.