One of the primary challenges for any growing family enterprise is moving beyond the “start-up” mentality to prepare for the next level of growth and complexity. Structures and processes that worked in the less formal earlier stages of the business are usually not suitable for long term growth and eventual succession.
Here are three takeaways from the Family Business 360 podcast episode “Beyond the Start-Up: Taking Your Family Business to the Next Level,” featuring Don Krahmer and Matt Bisturis of Schwabe, Williamson & Wyatt, to help you think about growing and professionalizing the family enterprise. You can also listen to the complete episode online.
Looking outside the family can help fill gaps
As a family business grows there will inevitably come a time when the needs of the business outpace what the founders or other family members can provide. Sometimes this is a result of limited resources (there aren’t enough family members to fill all the roles that the business requires), or limited knowledge or ability (there aren’t family members with the right skill sets to fill critical needs). Bringing in outside help in the form of professional advisors or key employees can help fill these resource and ability gaps. Matt Bisturis, Shareholder at Schwabe, Williamson & Wyatt, also emphasizes that distributing knowledge beyond the founders to other key personnel is just smart for succession planning; “If all of the knowledge is tied up with one or two founders, it makes it very difficult to successfully transition to the next generation.”
Finding investment partners that share your vision and values is critical
Access to capital through outside investment can be a key driver in growing the family business. It’s important to be thoughtful about who to bring in as a partner; not only will this person or entity bring money, but they will also be part of a long-term relationship and potentially have decision-making ability within your business. As Don Krahmer, Shareholder at Schwabe, Williamson & Wyatt, puts it, “Choose your partners wisely in life and otherwise.” He adds that it’s critical to take the time to really get to know the professionals with whom you plan to do business to ensure there is a values and chemistry fit.
An outside board of directors brings several benefits
Having outside perspectives in the form of a board of directors or advisors can be a huge boon to a growing business. A board can add a healthy level of formality to the business, provide expert insight on critical business decisions, and even help groom family members for leadership positions. In addition, embracing opportunities and taking risks to grow the business is easier with a solid team of trusted advisors around you. Aim to have a board that meets together in the same location rather than relaying information individually; the group dynamic is well-suited to addressing critical business questions.
Listen to the complete episode on the Family Business 360 podcast for more insights on taking the business to the next level.
Visit our website for a listing of upcoming Family Business 360 breakfast events.
Thank you to Don Krahmer and Matt Bisturis of Schwabe, Williamson & Wyatt for contributing their expertise to the podcast.