San Francisco Business Times: Starting a Business : Business Advice

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Opportunity No. 1: Professionalize your business structurdand operations. I frequently harangue the owners of growint family owned companies about the need to convert from aMom ‘n Pop business style to a fully professional with a mission statement, a strategic plan to guide decisions, an organizational chart and job written policies and procedures, affordable benefits, and agreemengt on how to change ownership and management without undue confusiohn or conflict. The process can get a bit thornu sometimes, but with strong commitment, a familt can professionalize successfully. This should be the year for your Challenge No.
1: Respond to unforeseen business and family financial The 2008 economy had the finances of many familyu companies flapping like bed sheets in a Lots of people can be leaders when timeaare good, but it takexs a special person to lead when timews are rough. Cash shortages, eroding markets and a near collapse of faitb in the future are challenging many businesa owners to keep their headsxon straight, to cut costs without cuttin their throats, and to remainm optimistic when it’s temptinb to turn company resources into personakl safety nets. Opportunity No.
2: Make crucia l succession decisions and act on John Davis of Harvard Businesw School urges family companies to plan when the timeeare good. But planning often has to be done even when timeasare bad. Leadership and ownershipl succession always profits from a fresbh look at what the familhy business needs forcontinued success. When conditionsx are calling for reviews and revisions inmany companies, succession planning can benefit from the analysis that’s being done for othet reasons. Challenge No. 2: Make crucial succession decisionws and acton them.
On the other thoughtful planning for family ownership continuity can be warpexd by a sense of crisix brought on by tougheconomic conditions. If temporary conditionsd make you wonder if the business really is a it might be hard to see the characteristicds that have made it successful in years past and that shouldr be maintained intothe future. Keep a cool Opportunity No. 3: Buy low. What’sx Warren Buffet’s current advice to stock investors? Buy! That perspective can be translatedc into golden opportunities for family ownedr companies that have a comfortable reserve and can afforsd the risk of expanding at the bottokm ofthe market.
If you have the means to buy, the prices are not likel to getmuch better. Challenge No. 3: Avoid selling low. But if you’red an acquisition target and prefefr tostay independent, put up every ounce of fight you have to avoifd selling at the bottom of the market. family owned business often have greater ability to withstan tough times because they can hunkeer down and live off the land without being harasses byoutside shareholders. Grit your teeth and lean into the Opportunity No. 4: Watch for the opening of new businesws doors. President-elect Obama has promise d to stimulate the economy outsids of bloated corporations and flounderingfinancialp institutions.
That can mean new business opportunities for family companiese in such areas as infrastructurr rebuildingand defense. If you don’t know how to pursues government contracts, this would be a good time to Challenge No. 4: Grow your business in a tight credit environment. The bankers are likelyg to keep wearingtheifr “Just Say No” T-shirtss for much of 2009. That means owners of family businesses of all typese and sizes should grab their bootstraps and find ways to grow and diversifthat don’t rely on the formall financial industry. Look for family members and friendzs who have the means and the confidencde to lend orbuy in.
Considef turning some unproductive assets into needed But don’t go to your credit cards. Opportunity No. 5: Make even the greatesft challenge intoan opportunity. OK, maybe every cloud doesn’t come with a built-ibn silver lining. But the business-owning family that has sound core values, and its eyes on the horizomn can convert even the uncertaintiess 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.