Credibility is Key to Success of Family Business Owners
Family businesses employ half the workforce in the country and are creating most new jobs. Yet 70 percent of family businesses fail to survive to the next generation. Greg McCann, author of the new book When Your Parents Sign the Paychecks, believes an unprepared second generation of family business owners is to blame.
Indianapolis, IN (PRWEB) April 12, 2007 -- Today more than 80 percent of businesses in the United States are family owned, including nearly one-third of the Fortune 500 companies, according to Ann Kinkade, director of University of Wisconsin-Madison's Family Business Center. Kinkade also points out that family businesses account for 78 percent of all new job creation and 60 percent of the nation's employment.
As they begin to develop their family-owned business, many owners aspire to reach the success levels of powerhouse family-owned companies, such as the Ford Motor Company, Anheuser-Busch, and Wal-Mart. Unfortunately, the majority of family-owned companies will never see a fraction of this success. Statistics show that 65 percent of second-generation family businesses fail and 90 percent of third-generation businesses fail.
Greg McCann, author of the newly released book When Your Parents Sign the Paychecks, says there are many reasons why family businesses struggle, but that two factors play a particularly critical role in whether or not a business will survive. "Family businesses tend to fail for two main reasons: lack of planning, which includes setting the strategic direction for the business, and lack of preparing for the transfer between generations, which includes developing the leadership of the next generation."
In his book, McCann explains that everything from a sense of entitlement to poor decision making can complicate the transition from one generation of family owners to the next. Yet there are many actions an individual within the family can take prior to an ownership transition that could go a long way in securing the survival of the family business and maintaining good relationships with family members and co-workers in the process.
"The best way that you as an individual can prepare for such a transfer is to build your credibility," says McCann. He offers the following four guidelines for building credibility both in and out of the family business:
| | - Work with your family business only if you have the self-discipline needed to earn credibility.
- Work with your family business only if your family shares your attitude about the importance of credibility.
- Gaining outside experience almost always adds to both your internal and external sense of credibility.
- Having outside experience helps you see where you feel entitled in your family's business and gives you empathy for non-family employees.
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When Your Parents Sign the Paychecks is available at all major bookstores and from the publisher (www.jist.com or 1.800.648.JIST). For a free media copy or to speak with the author, contact Natalie Ostrom.
JIST, America's Career Publisher, is the leading publisher of job search, career, occupational information, life skills and character education books, workbooks, assessments, videos and software.
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