Many small business successes today are the result of the actions of the previous generation. However, many owners of second-generation enterprises can not take advantage of the efforts of their ancestors. According to the US Small Business Administration, small businesses for family businesses are two out of three.
From my experience as a business coach and employee of a first-generation businessman, this failure is probably much more connected with the failure of people than the failure of knowledge. These 7 mistakes can help you avoid the setbacks that many second-party owners experience and achieve the desired business success.
- The mentality of the ivory tower - a mistake of knowledge Successful first generation business owners had the opportunity to send the next generation to college to learn improved business skills. Unfortunately, many of these professors in business schools never worked in the real world, but rather realized what they thought was supposed to be, and not what it was.
- External Clients Relationships - Rejection of People The first generation business owners knew that their businesses needed loyal customers and took the time to develop these relationships. Second-generation business owners believe that the relationships that their fathers or mothers automatically transferred to them.
- Source of employee loyalty - the refusal of people The loyalty of many employees in the family business begins with the first management team, and not without the need for a company. When the second generation entered, they believed that the loyalty of employees to the company.
- No Plan - Knowledge and Rejection of People The success of many small businesses was driven by an entrepreneurial spirit and did not necessarily have a plan. Without planning to pass, the next generation continues to do business without a solid written business plan. In today's market, any business that does not have a strategic plan for creating a new vision and a strategic action plan will have greater difficulty in surviving less prosperous.
- Savvy Performance - People Failure Because enterprises are controlled by people, management understands what motivates people to do their best. For example, when the current management team shouts poverty and cannot afford contributions for employees, but then acquires new expensive cars, their actions have a negative impact on employees. Employees do not mind new cars, but do not miss the luxury cars.
- Assumptions - Knowledge and Rejection of People Today, second- and third-generation business owners carry numerous assumptions that were true for their parents or grandparents, but not necessarily true today. Assumptions include:
- Market
- What motivates employees
- How long does a business take?
- Owner rights
Many first-generation business owners were governed by core values, where a person was as good as his or her word. Handshakes instead of formal contracts were much more valuable. Today, business owners do not have the same deep values of their ancestors. The result of the absence of values can be summed up in one word - greed.
Therefore, if you really want the efforts of the previous generation to be sustainable, see if you, as a second-generation business owner, want to make any of these mistakes. The success of your small business depends on your actions right now, so that you are not 2 of these 3 family companies that are experiencing a complete business failure.
