Let Your Family Business Be "Hereditary"

Needless to say, in China, almost all family businesses have to face a real problem: what kind of way should the entrepreneur's hard work go through? Do they train successors in the next generation or leave them to professional managers?

Press

Most of these entrepreneurs were born out of business, and many of them did not expect to achieve the goal today.

In the process of entrepreneurship and big business, most of them did not deliberately design their children and their families as successors, or did not have time to consider this problem.

For many entrepreneurs, it is not a safe thing to give to professional managers.

Their case is, in fact, a recent case of equity disputes. If a person is not to be trusted, the company will not be your own.

This is really tricky.

But the question is clearly there. You can not avoid it.

Family business is a controversial enterprise group.

It is generally believed that there are some endogenous institutional defects in the genes of family businesses.

Such factors as parents' willpower, cronyism and other factors have much conflict with the open and fair code of conduct required by the market mechanism, so they can only exist in a small-scale way in traditional fields.

The average life expectancy of European family businesses is 24 years, only 33% of enterprises reach second generations, and 13% of enterprises pass to third generations.

But in fact, the vitality of the family business is unexpectedly tenacious.

Even in the United States, where modern enterprise system is most developed, family management is a common phenomenon.

According to statistics, 90% of the companies in the United States, including some big Mac multinationals, are run by families.

42% of the companies are controlled by a family.

Generally speaking, it is a good thing that an enterprise can be born in the hands of entrepreneurs and succeed in the next generation.

Because from the logic of the occurrence and growth of enterprises, the successors of entrepreneurs are successors, and the successors of the next generation will be the successors of the business, which is in line with the subjective wishes of most entrepreneurs.

As far as the whole society is concerned, the entrepreneur's career can inherit in accordance with the wishes of the entrepreneur himself, and it is actually an incentive for entrepreneurs to start their own businesses.

In this way, an incentive mechanism for the production of entrepreneurial resources will be formed objectively.

The biggest advantage of family business is that the loyalty of team members is high, and the supervision cost of conditional inputs is low.

Arthur Lewis pointed out that "in a society where people can not expect outsiders to give loyal service, families may be the most suitable units for running large enterprises".

The family and family ties that entrepreneurs have will provide him with trust, loyalty and affection. These special resources derived from kinship actually form a special psychological contract, so that entrepreneurs do not have to worry too much about the moral hazard of betrayal and rebellion when they use certain special resources.

This is especially valuable at the beginning of entrepreneurship.

Because entrepreneurs' educational background and growth experience are very different, we can not expect all entrepreneurs to find cooperative resources from mainstream social relationships.

However, when entrepreneurs become successful, it is very difficult to pass the company on to their descendants.

The commercial inheritance is almost the same as that of the royal family.

Without adequate and careful arrangements, it is almost impossible to reserve all kinds of necessary resources.

Three factors help

From the perspective of the history of world business, it is necessary to satisfy several conditions for enterprises to pass smoothly and continuously within the family.

First of all, there must be a long-term and stable social environment.

According to the statistics of Hurun's oldest enterprise ranking, the oldest enterprise in the world is Japan's diamond group, which has 40 generations since its establishment and has a history of more than 1500 years.

These long-standing enterprises are mainly distributed in Europe, the United States and Japan and other countries.

Among them, the United States accounted for 15%, France accounted for 15%, the United Kingdom accounted for 15%, Italy accounted for 14%, Germany accounted for 12%, Japan accounted for 10%, and no one in China.

After a careful comparison of the history of these countries, you will find that although these countries have experienced more or less turbulence and chaos in the middle ages, they are generally quite stable.

Among them, Japan and the United Kingdom even showed a super stable situation.

This stable social environment makes the social and economic structure tend to be fixed for a long time. Most citizens can get wealth from family property inheritance besides their own labor income, so that wealth can be effectively accumulated in the private sector.

The rights of private property have been well protected.

In history, except for the Nazi persecution of Jews in the Second World War, few of these countries have been deprived of their civil property rights.

Social stability, citizens' property is not deprived, social wealth can be accumulated, and the property rights of enterprises can be pferred to the family level. Entrepreneurs can concentrate on managing their own businesses and make long-term strategic arrangements, so that enterprises can survive and expand continuously for a long time.

Secondly, there must be an excellent family culture tradition.

When education is not developed and popularized as a public product, the cultivation of enterprisers' quality relies mainly on the internal inheritance of the family.

Even now, many scholars believe that the cultivation of entrepreneurial ability can not be accomplished by any level of school education.

Although there is no conclusive evidence that entrepreneurship is derived from family heredity only, family tradition and education are closely related to it.

A family must cultivate offspring to become a qualified entrepreneur. Besides the necessary educational resources, it must also pay a lot of hard work.

From the perspective of the hereditary system of blood, in order to ensure that the offspring have good genetic genes, first of all, we must have the protection of the number of births, and provide competitive options for training successors.

Besides, the family also provides values, honor, education and quality to future generations.

These are to create an environment conducive to instilling the environment, which can be acquired through long-term education or indoctrination, and the educational resources should be used properly.

The third and most important point is to have an excellent institutionalized environment.

For family businesses, the key to survival and development lies in whether they can pform as soon as possible and pform themselves from the original small-scale workshop type enterprises to modern enterprises.

Because only enterprises with modern system have the ability to face the distant market and maintain strong competitive power in the rapidly changing market environment.

On the other hand, due to the high degree of specialization and specialization in modern society, enterprises must have a professional team to take care of them.

This requires enterprises to have a mechanism to accommodate excellent professional managers.

In this sense, enterprises must turn from the system to modernization.

We must rid ourselves of the tendency of personal dictatorship, establish a sound corporate governance structure and a hierarchical organization, and possess excellent corporate culture that is in line with the norms of mainstream social values.

In fact, in a good legal environment, a modern enterprise system is not very dependent on the entrepreneur's personal nature. It relies on the company's system.

Different entrepreneurs are in charge of the company, and will not endanger the safety of the company. The operation of the enterprise is not affected by any particular person.

Moreover, some arrangements in the modern enterprise system, such as the perfect corporate governance structure and the function of unlimited subdivision of shares owned by the shareholding system, will greatly reduce the difficulty of property inheritance.