Posts Tagged 'Business'

On Virtuality

I created a post a couple days ago regarding questions to ask if you want to be more mobile yourself, or create a more mobile, virtual office.  Now is such a great time to start or grow a business.  The technology exists to outsource so many business processes and operations…which leads to more efficiency.  When entrepreneurs can focus on their core business, without having to be swallowed up by non-core activities, the business can grow. 

If I can be anywhere, and be confident that my phone will be answered, my bills paid, my invoices sent, my HR issues taken care of…I can give 100% of my attention to growing the business.  Far too often, however, I see business owners that are afraid to give up control of administration.  Most business owners don’t start a business thinking “I can’t wait to pay bills, choose health insurance plans, and clean up my books.”

Many entrepreneurs think they can’t afford to outsource these functions.  However, what is the opportunity cost?  How much more business could you earn if you spent all your team developing new business?  How much more time would you bill? 

My feeling is that every small business needs to put a plan in place to move toward outsourcing as much as possible.  The plan is necessary to make certain data security, business processes, customer service are taken into account.  Only when non-core functions that can be outsourced, or virtualized, are, small businesses can grow to and past their full potential. 

Future blog posts will discuss some of the functions that can be outsourced, and how to go about the planning.

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More Family Business Crap

The situation with my family’s business keeps moving along.  It’s really so sad.  A company that was built and run by brothers who loved each other, and who would do anything to take care of their families, is being torn apart by their children.  It is now a virtual certainty that the company will not survive with all the cousins retaining their ownership and positions in the company.  It will probably survive in some way, but one side of the family will be forced to relinquish control. 

Among the losses:

  • 10 lbs. by me, 15 by my grandfather
  • tens of thousands of dollars in CPA and lawyers fees
  • hundreds of hours of sleep
  • countless business because attention is diverted elsewhere
  • all trust that family can be counted on, and a solid family business can provide a safe haven

i did some research and found out that only 8% of family businesses make it to a third generation.  That is incredibly sad.  Our parents and grandparents were builders.  We’re now scavengers and arbritagers.

Not My Family

In the past I have read about, heard news stories about, and even seen movies about families that have been torn apart by their family businesses.  The story usually has a person that has started a company, and built it to be monstrous.  It functions smoothly because he is the ultimate decision-maker.  As that person leaves power to multiple heirs, the spread in decision-making, along with the spread in money, leads to some epic blow ups. 

Of course, on of the main reasons for these stories is greed.  Everyone who has inherited part of this company wants to get paid more and more.  They can all justify why they’re entitled to it.

Another reason is the need for more power.  Most of the heirs looked up to the company patriarch partly due to the power he wielded from the corner office, the fear (or love) he insprired in his workers, and the relationships he built with customers and vendors.  They try to rule the exact same way, even though they may have different personalities.

I think the main reason heirs end up tearing family businesses, and, thus, families apart is that they all came into the business AFTER it was built.  They can’t possilby understand what it took to get to that level.  Even if they were growing up while dad was building the business, they didn’t undertand business in general.  If you haven’t been through the tough times of building the business, you can’t have the full respect for it, as the patriarch does. 

I mention all this because there is turmoil in my family’s business.  I’m not a part of it yet, and don’t know if I ever will be.  However, as my grandfather and his brother move away from day to day operations (well into their 80’s), my mother, uncles, and their cousins are taking over.  I know they all want the company to succeed, but they differ in their driving forces.  Some want to continue the company to hand to thier kids.  Some just want more money.  Some just want to keep a job until retirement. 

This is all very painful to me because my grandfather just wants everyone in his family to be happy.  He built this business, in part, because he wanted to keep a job.  The by-product was building a company that can sustain itself, and is extremely successful.  He can now hand it over to his kids, and hopefully, grandkids so we will never have to worry for money. 

I hope this story has the happy ending I dream of (and will never actually see because the company will remain for my children and grandchcildren), rather than the sensational Hollywood ending where the family business falls apart.