Family Businesses Need Entrepreneurs For Long-Run Success

Family Businesses need to create second/third generation entrepreneurs. Can Founders becoming great mentors?

Tony Bury

Family Businesses Need Entrepreneurs For Long-Run Success
BY MICHAEL J. ROBERTS AND JOHN A. DAVIS

In the world of family business, the entrepreneurs we celebrate are usually founders of companies. These clever, hardworking individuals identify a good business opportunity, scrape together some money and loyal employees, and start a company that takes off. The heirs of the founder and later generations of the family are supposed to take care of and grow the founder’s creation; they are not expected to be entrepreneurs themselves. Even attempting to reinvent the family company can be seen as disloyal by the family.

This constraint often kills the family business.

We think it is time to reassess the importance of entrepreneurs for not only the continuation of the family company, but for the continued success of the family itself.

Managers inside your core business who think like entrepreneurs (we call them intrapreneurs) can identify opportunities that move your family company into new lines of business, rejuvenate the founder’s legacy, and put the enterprise on a new growth path. Entrepreneurs (typically family members) working outside the business but with family financial support can keep talented kin inside a broader “family enterprise,” diversify business activities, and build assets.

Families that want to stay in business for another generation don’t have a choice except to encourage entrepreneurship in and out of their company. There are business reasons and family reasons why we think this is true.

The Business Reasons

In today’s competitive environment of rapid technological change and quickly evolving industries, it doesn’t pay to become too attached to current lines of business or methods for serving customer needs. You need to regularly change what you make and sell, and probably how you make and sell it. You must be nimble and, as certain lines of business wane, be able to identify growth opportunities in and out of the core industry and pursue them in experimental, cost-effective ways. For that, you need the risk-taking, resourceful attitude of an entrepreneur.

Read full article here

Source: Forbes

Leave a Reply

*