Edition 38 – Strategy – Performance – Management – Legacy
I have been working with family business my entire professional life. In my opinion, family business is the most dynamic and enterprising business sector not only in Australia, but globally.
Family businesses invest and grow whilst larger corporates are contracting and retrenching. They contribute wealth to the Australian community through the payment of taxes in Australia, not engage in a series of convoluted transactions that minimise their obligations offshore tax havens.
Family business employs around 40% of the Australian workforce, extraordinary when you consider the average family business has no more than 15 people operating within it.
As I embark on a new chapter in my professional life, my aim is to help family businesses in the following key areas:
Surprisingly few family businesses have a strategy for where they are heading. Without a strategy, how do you know what work you should be doing, what industry you’re really in, who your competitors are and how to maximise the returns to your family?
Those family businesses that have a strategy have a pre-determined path they are walking down. Whilst those businesses are not without issues, by being aware of their strategy, they are able to isolate the important from the immediate and keep to the path.
Performance is all about accountability. How are you travelling vs. what result were you expecting? What are the key numbers that are driving your business (and I don’t mean profit as profit is a result, not a measure of activity)? You need to measure activity in order to measure business performance. What happens if you vary your rate of activity? How does that change the overall performance of the business? And how often are you measuring activity. Every three months is a minimum for detailed reporting, weekly for your highlights report.
Management is all about ensuring the right people are in the right place doing the right thing in the right direction. Whether it is transitioning a family business to the second generation, engaging a non-family General Manager or formalising your management structure to accommodate business growth, I see Management as the key factor in restricting the growth of family business into 2017.
Finally, legacy is all about what you’re looking to create for your family. For some families, their legacy is passing the business down to the next generation. For others, legacy is around building wealth outside of the family business. Then there are families that see their legacy as creating opportunities for causes the family strongly believes in, be they charitable, religious or sporting.
I’m excited about the future of family business and the contribution it makes to our nation and our way of life. I look forward to helping more families realise their true potential through their family business.
This Week’s Tip
Your business strategy is at the heart of what you are looking to achieve for your family through your family business.