Family owned businesses are the core of America’s economy. Family businesses account for 64 percent of U.S. gross domestic product, generate 62 percent of the country’s employment, and account for 78 percent of all new job creation.
This important sector also represents the highest risk for failure. According to Forbes, less than one-third of family businesses survive the transition from first to second generation ownership. Another 50% don’t survive the transition from second to the third generation.
It is vital that family owned businesses continue to flourish for the sake of our economy, especially when transitioning to the next-generation of leadership.Below, family-owned, single-source manufacturing firm, T&D Metal Products, provides insight on how to defy the statistics, and succeed as a multi-generation, family-owned business.
Below, family-owned, single-source manufacturing firm, T&D Metal Products, provides insight on how to defy the statistics, and succeed as a multi-generation, family-owned business.
Establish goals
It’s essential to establish goals in any type of business, but this is particularly important for family-owned businesses. As a family business owner, you must ask yourself: What are my goals for the next year? What are my goals for the next five years?(When considering these questions, ask yourself: who, what, when, where, why, and how? – will you turn these goals into a reality.)
Always plan ahead
Similar to establishing goals, family-owned businesses must plan ahead for the next generation of leadership. It’s never too early to focus on growing your next generation of leaders, as this will save you from headaches later on.Don’t be afraid to take risks.
Related Reading: Bronx Factory Tour: New York Knitting | NYC Garment District Factory Q&A | Advice For New Factory Owners
Don’t be afraid to take risks
It’s easy for family-owned businesses to become stuck in the monotony of traditional business practices that have been established by previous leadership generations. We do not recommend ditching these traditional values, but a little change won’t hurt. In many situations, change is good. In order for your business to achieve growth, risks must be taken.
Have a clean-break of leadership
This is a hard one. In order to have a successful transition of leadership, it’s essential for previous leaders to have a ‘hands-off’ approach. Similar to the analogy, “Too many cooks in the kitchen,” the same applies in this situation.
This all boils down to trust. If you’ve recently transitioned into the role of family-business owner, trust yourself. If you’ve recently transitioned out of the family-business owner role, trust that you have prepared your staff for this change in leadership.
About T&D Metal Products:
T&D is a third-generation family-owned, fabricating manufacturer based in Watseka, Illinois. In 2012, when T&D made the jump from second-to-third generation family-owned business, the company refined their business model to allow for success for generations to come.
Since making the transition from second-to-third generation ownership, T&D has experienced 54% growth, which has resulted in tripling the trucking fleet to meet shipping demands as well as adding an additional 40,000 sq. ft. of space. T&D has also doubled their sales department to manage customer inquiries while focusing on client retention and growth. The next 5 years will see an additional 50% revenue growth for the company with a focus on building the next generation of leadership.
Have a Product Idea? We’ll Help You Get Started!
On Maker’s Row you can learn process, organize and manage your product development and find a manufacturer. Learn more!
