Growth Newsletter

In the 1982 hit song “Hard to Say I’m Sorry”, Chicago’s Peter Cetera’s opening line was “Everybody needs a little time away”. He was stating the case for people in a relationship to spend some time apart, so they truly appreciate each other and what they have together.

In my opinion, the relationship that most family business owners have with their business is pretty much the same. I’ve long advocated for people to get far away from their businesses when they are involved in long term family business planning.

Return on Investment, or ROI, is a financial term to describe what is the performance of your investment relative to how much is invested. It is used by finance types to value businesses, determine lending capacity and estimate risk.

In family business, I believe there are 5 elements to ROI – however, I prefer to simplify it and call them the 5 Returns in Family Business.

We had an interesting experience in our household recently that resonated with something that I’ve often seen inside family businesses.

When I place myself into the driver’s seat of my Ford Falcon XR8 Sprint and fire up the 5.0 litre V8, the dashboard presents an array of data to me. The car tells me, amongst other things:

In a great many of the family businesses that I know and have worked with, there are multiple family members working in the business. Most prevalent is the numbers of spouses that work with each other.

No, I’m not talking today about the 1978 classic by Hot Chocolate which, by the way, still sounds good today when you’re out cruising around with the windows down and the volume cranked up.

I’m talking about the decisions that owners and managers make in family business when it comes time to moving people on. Let me explain.

I was working with one of my great family business clients recently. We were talking through the changes they have introduced into their business throughout the past 12 months, the progress they have made and the work still to be done.

Amongst the family businesses that I know and work with, a pattern is already emerging in 2018 – known quantities.

So, what is a known quantity? Put simply, it is someone you know and trust and are willing to bring into your business as an employee to help you move from where you are to where you want to be.

My family and I spent a few weeks over the Christmas break holidaying in the USA. We spent our last four days in Southern California right at the time of the horrific mudslides that, at the time of writing, had claimed 18 lives in and around the central coast city of Santa Barbara.

Whilst we were some 200km south of the devastation, we nonetheless experienced an emergency warning text message on the Tuesday afternoon to alert us to the fact that the weather was deteriorating and there was a potential danger.

I was driving into the Sydney CBD a few weeks back on the M5. As per usual, the somewhat smooth flow of progress came to a grinding halt at the King Georges Road on-ramp. From there, all the way through the M5 East tunnel, along Southern Cross Drive and into the Eastern Distributor, it was a painful crawl.

I was doing this once. I’m sure there were people around me that do it every day. They don’t think about alternate routes, alternate times to travel or different modes of transport. I’m certain that there were people in that conga line of traffic that don’t stop and ask themselves why they’re doing it.