Did you know that even though 627,000 new businesses open up each year, 595,000 small businesses close each year?! That’s quite a substantial amount. Part of the closures has to do with the economy or uncontrollable events like the pandemic.
But a lot of the closures might also have to do with a family business crisis. If you are trying to lead your family company through a business disruption, then we have laid out some tips for you below. So keep reading!
Make Sure Lines of Communication Stay Open
When a family company is going through a crisis, the main priority should be to keep the lines of communication open and stay transparent about all eventualities. You should try to do this without creating panic in the employees or the management team, of course.
A lot of business owners incline to hide things or at least not share the entire truth when going through business disruption. But that’s the wrong attitude to take on.
You will not be able to solve any business crisis on your own. You will need the assistance and creativity of the entire team behind you, to do so. That’s why share as many details about the crisis as possible with your entire company.
This will also ensure that the people who are loyal to you and care about the family company will stick around. They won’t end up abandoning ship because they weren’t informed of the details of the business disruption.
Take Any Tough Decisions That Might Be Necessary
The other thing that business owners that wish to lead an organization through a crisis tend to do is avoid taking those tough decisions. Yes, it can’t be easy letting go of employees that have been loyal to you through the ages. Or removing management team members who aren’t pulling their weight.
But it’s crucial to do so. These tough decisions could ensure that your family company glides through the disruption better than expected because it’s not carrying dead weight.
Again, don’t forget to keep the lines of communication open during these tough decisions as well. Inform everyone involved and everyone in the company why you made the decision you made. And how it will help your business move forward in this period of crisis.
This way everyone will be on board with your tough decisions and applaud you for your heroism and courage.
Manage Risks and Contingencies by Planning Ahead
You might think it’s too late to plan, especially since you are already in crisis mode. But that’s not true.
Even now, when your family company is dealing with a business crisis, you can spend time with your management team to manage further risks, and plan for the future. Things are constantly changing in the business world, and by planning ahead, you can ensure that your family company stays afloat during its worst times.
Make Sure the Management Team Is Capable and Effective
When dealing with a business crisis, ensure that the management team is effective at their job. For example, if you have a management team filled with journalists when the actual business has nothing to do with journalism, then you are going to be in deep trouble.
In a family business, it can be harder to ensure that the board members and management team aren’t filled with incapable cousins, uncles, and other relatives. But, if you wish to ensure your business doesn’t close down after a few months, you will need to cull the management team with a bit of ruthlessness.
Do Not Forget About Your Values or Why You Began the Business
Too many small businesses forget why they started when they begin to go through business disruption. The values that got them started, start diluting and disappearing. This results in a lack of cohesiveness and confusion about the reason why the business is there in the first place.
If you started the company to help your employees grow and shine, then you need to keep this in mind even more during a crisis. Or, if you began the company to build the community around you, and boost the younger generation, then don’t forget that.
This will ensure that you don’t start moving in the wrong direction when a crisis hits. This could result in your business failing faster than it would otherwise. If your employees think the business has lost its values and doesn’t have the qualities that motivated them to join in the first place, they will be inclined to jump ship.
Encourage Out-Of-The-Box Thinking in the Next Generation
Another way to future-proof your family company is by encouraging the next generation to start thinking more entrepreneurially and creatively. The same ideas that got you into trouble in the first place are not going to help you get out of it.
That’s why encouraging everyone (not only the future generations) to come up with groundbreaking ideas is the way to go. Build a culture in your company that encourages this kind of thinking and rewards it, rather than punish it (which is the norm in a lot of businesses).
A Business Crisis Doesn’t Mean It’s the End of Your Business
Many small and big businesses have pulled themselves out of a business crisis and come out ahead in the past and the same can happen to your family company as well. Just because you’re going through a business disruption right now, doesn’t mean that you can’t come out better than ever due to it.
Follow the tips we have laid out above. And make sure to keep optimism and positivity as the primary feeling in the company.
If you are interested in getting some advice from a family business consulting group, then contact Positively People today! We would like to help your family business function at its highest level, no matter how big or small you are.