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FBA SA State Conference

I. The Vital Institution of Family Business by Dr. Ramona Heck: Below are key points made this article:

Definition of Family Business in terms of degrees: They range from broad to narrow as listed below ad include four levels of multiple criteria:

1. Ownership 50% or greater

2. Ownership 50% or greater PLUS a family member manager

3. Ownership 50% or more PLUS a family member manager PLUS two or more family members in the business

4. Ownership 50% or more PLUS a family member manager PLUS two or more family members in the business PLUS second generation or higher or intent to keep business in the family.

1. Given the size, scope, and influence of family businesses, they are vital institutions in our US economy

2. Family management can help to foster innovative business practices that are responsible for significant growth

3. Family heritage and tradition have significantly benefited the economic value of family businesses.

4. Family businesses cultivate and support the leadership by encouraging positive role models and fair promotion practices for all employees, including family members

5. Family businesses benefit not only the owning family but are responsible to the business ‘family’ and the environment and community in which they operate.

6. Family businesses engage in strategic planning in order to accomplish their mission and objectives.

 

 

II. Fast-growth Family Firms by Dr. Nancy Upton

· Fast-growth family firms prepare written plans that communicate their visions. Plans are specific enough to influence management decisions.

· Short-term plans are appropriate for periods of rapid growth, but long-term plans are necessary for sustainable growth and profitability.

· Fast-growth family firms share information with all employees about actual company performance versus planned performance or goals.

· Fast-growth family firms use their boards to develop, review, and approve their business plans as well as evaluate their performance in light of the plan.

· With employee input, fast-growth family businesses set job performance standards tied to the business plan.

· Fast-growth family businesses prefer to be first to the market with high quality products and services.

· Fast-growth firms are rewarded in the market place for pursuing a high quality strategy that takes advantage of the family’s name and pride in that name.

· Fast-growth family business attributes 70% of revenue to existing products and 30% to new ones.

· Fast-growth family businesses generate approximately 80% of their revenue base from existing customers while adding new customers that expand sales by 20%.

· Fast-growth family firms seek funding sources that allow them to maintain control and yet grow aggressively.

· Fast-growth family firms use funding sources that allow them to retain voting control of their business.

(Rank your family business on a scale of 1-7, 1 being highly reactive and 7 being highly proactive in relationship to the discussed “best practices”)