Family Business "Evergreen Operation"

Whether in developed or developing countries, family businesses are growing and developing in a dogged way. Gaierxike, an American scholar, believes that "even the most conservative estimate is that the family owned or operated enterprises account for between 65% and 80% of the world's enterprises. 40% of the top 500 enterprises in the world are owned or operated by families.

It can be seen that family businesses occupy a very important position in the national economy. However, the curse of "rich three generations" has always troubled family businesses. What we want to know is how to make family businesses continue to thrive forever.

　 Advantages of family businesses

Most family businesses rise or follow a similar process of development. The pioneers of family businesses start from a certain business and continue to make them bigger and stronger after hard struggle. After the steady growth of their profits, Entrepreneurship People try to involve their children in business. If the children succeed in inheriting the business, they will be developed into the common ownership and control of generations of the same family. Administration Enterprises. Family members run family businesses together to work together to maintain control of family businesses.

As a matter of fact, the ownership and control of family members in family businesses are two rights. Family members participate in the management of enterprises and participate in the distribution of residual claims. So they are more motivated to run the business well. Moreover, due to the maintenance of consanguinity, family members have a high sense of identity and sense of unity towards their families, which creates a sacred responsibility for their families. This also enables family members to perform their duties for family businesses, regardless of whether their remuneration and remuneration are in a reasonable proportions, thus reducing transaction costs among members. This is the advantage that family businesses are different from other enterprises, and is also the reason why family businesses can exist and grow tenaciously.

However, as the saying goes, "there are defects and mutual differences", family businesses have inherent advantages and inherent defects. According to the researchers, only after the first generation of entrepreneurs set up their own business, only 10%-13% could cross the line of family business management. The formulation of family businesses "rich in three generations" has also existed for a long time. What causes the failure of ownership transformation of family businesses? {page_break}
 

　　 Avoid disputes

It is no doubt that the family business has gone from Yunfeng peak to myth. The most obvious reason for the collapse of family businesses is the resentment and struggle among family members. The ownership and control of family members became the "culprit" of family disputes. UBS (Singapore) Wealth management Li Yuyun, head of the Family Services Department, believes that the underlying reason for this phenomenon is the lack of transparency, that is, the decision-making process, the allocation of resources and the division of labor among family members are not clear.

In China, true Kung Fu is the only Chinese fast food king who can compete with McDonald's and KFC. But the internal strife of the family business has broken its surface. Because of the fact that the infighting has not yet been listed, the real Kung Fu has recently launched a "audit storm". It has put the big shareholder Pan Yuhai and chairman Cai Dabiao in the face of public struggle again. Why do two major shareholders who have shared difficulties do not share "wealth"?

Coincidentally, the three brothers' internal infighting in Hongkong's Sun Hung Kai properties has affected their share price declines. The fight against family members is a fatal blow to family businesses. In view of this, experts say it is necessary to regulate family members' roles as shareholders, board members and managers, which will help to avoid these risks.

The management systems adopted by family businesses that are united and competitive are often determined by needs, and more or less on specific policies are determined by family size, values, educational level of members, and industries in which enterprises are located. Some family businesses can always maintain their leading edge in the field. For example, the Australian investment company ROI Group is controlled by the Owens family. So far, it has been in four generations. The company encourages family members to work in other companies first, and after accumulating certain related experience, they go back to ROI to seek senior management positions. The appointment of family members must be approved by the board of directors and the Advisory Committee. The board of directors represents the family, and the Advisory Committee is composed of a group of independent business consultants, who are responsible for providing strategic guidance to the board. This will not only avoid unnecessary disputes, but also help to promote the harmony of family businesses.

　　 Five magic weapons for family businesses to survive

In short, to ensure the success of enterprises and the development of families, family businesses must overcome two intertwined problems: first, to achieve excellent business performance; two, to strive to keep the family status of entrepreneurs. To this end, family businesses must perform well in five aspects and make these five aspects coordinate: maintain harmonious relations within the family and understand how the family should participate in the operation of the enterprise; establish a ownership structure that can provide sufficient capital for development and enable the family to effectively control the core business of the enterprise; implement strong governance and establish dynamic business combinations for the company; carry out professional management of family wealth; and establish charity. fund The family values are inherited from generation to generation.