What’s the biggest, most common pain point for the majority of family-owned businesses?
This is important — after all, around 80% of all businesses are family-owned and operated.
So what keeps these business owners up at night?
- Accessing capital to help grow their operations?
- Finding ways to maintain their margin in the face of giant corporations
- Increasing competition from overseas, whether from China, South America, or Southeast Asia?
- Reducing emissions and making a successful environmental transition
- They’re likely facing all of those issues, but generally they aren’t too worried about any of them. It’s something else.
The biggest pain point for most family-owned businesses is that the kids don’t want to take over.
I know that for two reasons. One, because my dad runs a family-owned business and he won’t let up about it.
And two, because not long ago I went to a summit held specifically for family-owned business by the Banque de Luxembourg, which brought together both current owners and operators and their relatives. Over and over, with older and younger generations, the conversations always came back to the transmission problem.
One option among many
One key aspect referenced at the summit was that because many of these businesses were started by people who didn’t have a ton of schooling, the kids end up being the ones with the most training and experience in other areas. They’ve gone off to university, they’ve had opportunities their parents never dreamed of, they’ve grown up in a very different environment than did their parents’ generation.
That means that for the kids the family business is only one of a virtually unending line of possibilities. Making a family business attractive isn’t just important for recruiting non-family members; it’s also a critical aspect of winning over that inter-family talent.
That’s what made me realize that even though we talk a lot about digitalization in terms of competitive needs, we also need to talk about digitalization in terms of transmitting family businesses from generation to generation.
Because most members of the younger generations that I’ve talked to are just like me — they don’t want to get involved in the family business because it’s a 20th century operation that needs a massive overhaul to bring it up to digital speed.
We can make it easier on everyone
Again, I have personal experience here. The first year that I spent at Assabban SA was entirely devoted to upgrading processes and getting as many digital tools in place as possible. Looking back on that year, I get why kids aren’t interested in taking on that kind of overhaul — I certainly wouldn’t do it twice. I really only did it the first time because we were in the worst days of the COVID crisis.
So if a family-business wants to maximize their chances of having the next generation step in and take over, they need to make sure that the company has modernized and adapted to the digital age.
(By the way, even if no one in the family wants to take over, it’s still critical to make the digital transition because you’ll need to find someone from outside of the family to take over, whether through a management buyout or finding an acquirer. Not having already modernized the business becomes an even larger obstacle when you don’t have any good old fashioned guilt-tripping leverage)
I don’t know that I’ll ever step into my father’s shoes at Assabban SA — after all, I left to launch OrderCast! But I do know that the work I did there, both in terms of internal processes and then upgrading the ordering experience to a fully functioning e-commerce solution, has made the business more attractive to clients and to talent who could eventually take over — whether that’s my cousin who just finished her business degree or our long-time back-office manager.
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OrderCast gives wholesalers a turnkey solution that converts their catalog into an e-commerce site, letting customers browse, order, pay, and track their shipments online. Designed to be fully compatible with wholesalers’ existing back-office solutions, OrderCast can get your online shop up and running in a matter of days, if not hours. Get in touch to schedule a demo here.
