Family businesses deserve to be pleased with their accomplishments.  After all, according to an article in Bloomberg Businessweek family-owned businesses are responsible for 60% of all employment in the U.S., 78% of all new employment and add 50% to the national gross domestic product.  The SBA points out that 90% of all businesses in the U.S. are family-owned.  Family businesses are the foundation of our country’s economy.

The question is: How solid is the foundation of each, individual family business? A Family Business Quarterly article highlights the reality of how few family-owned businesses reach the legacy stage.  Only thirty-percent (30%) of family-owned businesses survive into the second generation, 11% make it to the third generation and a meager 3% continue into to the fourth generation or beyond.

Solidifying the foundation of the family business.

Imagine the foundation of your  family business as a three-legged stool. LEG 1: Running your business as a business. LEG 2: Perspective. LEG 3: Communication.  These three “legs” collectively hold up the foundation of your family business and without any one of them your business becomes unstable.

Running your business as a business

In working with family businesses, I refer to this first leg with a more comprehensive: “Running your company as a business that happens to be owned by a family, not running it as a family.”

At one point or another we are all guilty of making business decisions as if they are family-focused decisions.  Many family-focused decisions are “gut feel” reactions with the primary objective to avoid “making-waves”.  Business-focused decisions are based on sound business principles with the objective of maximizing profits while solidifying the business for strong growth well into the future. While business-focused decisions are for the most part based on logic, good managers do use “emotional gut-feelings” for some business decisions.  But, as we all know, this is a different gut-feeling than the one used for family-focused decisions.


Since we have known our family from birth,  it is only natural to assume we know what they are thinking and, thus, their intentions for the family business.  But how well do we really know and understand the perspectives of other members of our family?  For an answer, just think back to how the teenage years went in your house.  Then add the years of separation from when the children moved out to live on their own.   Last, but certainly not least, each family member faces different issues based on the individual’s different stages of life.  Some are considering marriage, others saving for children’s college tuitions while still others consider slowing down or full retirement.

“Assuming” we really know and understand others’ perspectives on what is best for the business leads to conflict.  This often becomes a problem when we are angry and say something on the spur of the moment without considering the listener’s perspective.  Even when we’re at our busiest, we have to take the time to get to know and consider each other’s perspective.    The only way this will happen is through communication.


Communication within a business is a key element of its success.  But within families we often take communication for granted. Running your business the same way you would run your family leads to less communication within the business and, as a result, consequences such as family members driving the business in different directions, confusion among the staff or worse.  And it is naïve to think that customers do not see this confusion.  Customers will go to your competitor well before they would talk to you about it.

Good communication is hard work.  It takes time which we never have enough of.  It takes patience often when we have the least of it.  It is more than just hearing what is being said.  It is concentrating to listen for the message of what is being said.  Yes, good communication is hard work but the rewards are increased stability and harmony in your business and your family.