San Francisco Business Times: Starting a Business : Business Advice

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Opportunity No. 1: Professionalize your business structure and I frequently harangue the ownerz of growing family owned companies about the need to conver t from aMom ‘n Pop businesx style to a fully professional style, with a missiomn statement, a strategic plan to guidew decisions, an organizational chart and job written policies and procedures, affordable benefits, and agreement on how to changr ownership and management without undue confusion or conflict. The processz can get a bit thorny sometimes, but with stronbg commitment, a family can professionalize This should be the year for your Challenge No. 1: Respond to unforeseen business and familyfinancial demands.
The 2008 economt had the finances of many family companies flapping like bed sheetd ina windstorm. Lots of people can be leaders when timeare good, but it takes a special perso n to lead when times are rough. Cash shortages, erodinh markets and a near collapse of fait in the future are challenging many businessx owners to keep their heads on to cut costs without cutting their and to remain optimisticwhen it’s tempting to turn companu resources into personal safety Opportunity No. 2: Make crucial succession decisions and acton them. John Daviws of Harvard Business School urges family companies to plan when the timeasare good.
But planning often has to be done even when timexare bad. Leadership and ownershi p succession always profits from a fres h look at what the family business needs forcontinuerd success. When conditions are calling for reviews and revisions in many succession planning can benefirt from theanalysis that’s being done for otherf reasons. Challenge No. 2: Make crucialo succession decisions and act on On theother hand, thoughtful planningy for family ownership continuit can be warped by a senser of crisis brought on by tough economic conditions.
If temporaruy conditions make you wonder if the business really isa success, it mightt be hard to see the characteristicsz that have made it successful in yearse past and that should be maintained into the future. Keep a cool Opportunity No. 3: Buy low. What’s Warrej Buffet’s current advice to stock investors? Buy! That perspectivre can be translated into golden opportunities for familyu owned companies that have a comfortable reserve and can afforrd the risk of expanding at the bottom of the If you have the meansto buy, the prices are not likelyh to get much better. Challenge No. 3: Avoid selling low.
But if you’re an acquisition target and prefer to stay put up every ounce of fighr you have to avoid selling at the bottok ofthe market. Actually, familyt owned business often have greater ability to withstand tough times because they can hunkerf down and live off the land without beinvg harassed byoutside shareholders. Grit your teethb and lean intothe wind. Opportunit y No. 4: Watch for the opening of newbusiness doors. President-elect Obama has promised to stimulate the economhy outside of bloated corporations and flounderingfinanciaol institutions. That can mean new business opportunities for familyt companies in such areas as infrastructure rebuildingand defense.
If you don’f know how to pursue governmen contracts, this would be a good time to Challenge No. 4: Grow your businesd in a tightcrediyt environment. The bankers are likely to keep wearingtheid “Just Say No” T-shirts for much of 2009. That meanse owners of family businesses of all types and sizes should grab their bootstraps and find ways to grow and diversif ythat don’t rely on the forma l financial industry. Look for family members and friends who have the means and the confidencse to lend orbuy in. Consider turning some unproductive assets intoneeded liquidity. But don’t go to your crediy cards.
Opportunity No. 5: Make even the greatestt challenge intoan opportunity. OK, maybe everuy cloud doesn’t come with a built-i n silver lining. But the business-owning family that has self-confidence, soundf core values, and its eyes on the horizon can convert even the uncertaintiesd of 2008 into a pathway upwardin 2009. Try it and see. And when you look back on all this and remember you read ithere first.