Commitment and a shared vision: that’s where it starts for any small business. For a family-owned business, this is especially true because these values become clearer and easier to successfully execute.
Over 5 million (19%) of the 28.8 million small businesses in the U.S. are family-owned. With lower employee turnover and their unique ability to focus on resilience rather than performance in times of economic survival, owning or supporting family-owned businesses has never been more important than now.
We are in unprecedented economic times. The coronavirus is sweeping the globe at exponential speeds and small, local businesses are already starting to feel its impact. Examining what makes family-owned businesses survive is valuable for any business owner or manager, no matter the industry.
The Value of Diverse Generations in the Workplace
Most established family-owned businesses have the advantage of age on their side. With the older generation bringing lived experience and insights to the table, and younger generations keeping current trends in technology and the marketplace in focus, this powerhouse of leadership and synergy enables more ideas and innovation, while also avoiding costly mistakes.
For any business, no matter the size, leveraging age diversity in leadership and planning can result in more commitment from the team and surprising business strategies for success.
Higher Retention and Focus on Relationships
Building trust and unity (teamwork) is key for both working and customer relationships. Family-owned businesses have the advantage of family pride in the business to foster reliable work ethics. They must balance personal and business responsibilities that, when done right, can result in productive and happy work environments.
All businesses can benefit from a positive and supportive workplace culture. For example, Human Resource policies and procedures should encourage commitment and foster growth for all employees, no matter their position. In addition, a focus on team-building activities and open communication between management and employees can:
- Improve employee relationships – providing an environment that removes titles and helps connect all employees in a common activity.
- Improve communication – by removing typical group and title barriers and build trust amongst employees.
- Opportunity to highlight strengths and weaknesses – to improve employee skills that can be taken back into the workplace for increased productivity.
Consistent and thoughtful team-building activities can reduce costly turnover and have a quick impact on the financial performance of the company.
Budget Conscious and Strategic Spending
Many family-owned businesses tend to be more frugal with expenses. The focus on minimizing debt while spending efficiently creates confidence in their budget decisions and stronger financial statements.
Stronger financial statements help to apply for and leverage credit to increase profit, expand operations, or carry expenses while collecting on outstanding payables. Business bankers are trained to know industry needs and advise on what credit products best meet cash flow needs.
No matter the size of your business, at some point you will need to leverage credit to increase profit or carry expenses while collecting on outstanding payables. Be sure to review your financing options with your business banker to identify the most appropriate financial services for your industry. Business bankers are trained to know your industry needs and advise on what credit products best meet your cash flow needs.
Banking Solutions You Need and Deserve
We at Home Bank of California, as a family-owned business ourselves, take pride in knowing our customers and customizing solutions to improve their businesses. Whether you are looking to better manage cash flow, move into a bigger commercial space, or purchase industry equipment, talk to one of our bankers to review your financial service options.
If you would like to speak with a Home Bank of California Business Banker today, contact us to arrange a convenient appointment.