advisory boards

3 Habits of Highly Successful Family Businesses – #1 Advisory Boards

Why is it that so few family businesses make it into future generations?

Often the earlier generation in a family business rides a wave of success and everything in the business and family runs smoothly. Like a sports team, when the team is in first place the clubhouse issues are smoothed over, but when the team falls into last place, frustration builds and negativity takes over the team. In an established family business, the issues develop when either the success of the business slows down or the next generation is entering the family business. Everything just gets more difficult towards the end of the first generation’s run.

There are three things that family businesses use to maintain success and smooth the transition into the next generation:

More…

Going Outside – The Runaway Manager

“Before we knew it, we learned that we were having a Grand Opening for our new Manhattan retail store later that week. And we weren’t even a retailer“

To help with the growth our family business, our family hired a key non-family manager for the first time.  Attracting an outside manager into a family business is especially challenging with regards to compensation.  Like many closely-held firms, we weren’t willing to give up equity in the business, so we created a compensation package built around a performance bonus.  We selected an outside executive who came from a larger company, who brought proven expertise to grow our company rapidly. Coupled with their high ambition, it seemed like a good idea to tie their compensation into sales growth. More…