Family business is profitable and brings many rewards, but it can also be very tricky when bumping into bottlenecks caused by gaps in staffing.
Family-owned companies present special challenges to those who run them. The reason? They can be quirky, developing unique cultures and procedures as they grow and mature. That's fine, as long as they continue to be managed by people who are steeped in the traditions, or at least able to adapt to them. But what happens when a firm grows to a point that it must hire outside professional help to remain competitive? That can be a difficult task for all involved.
Just ask Melanie Kau.
Stewart Thornhill at The National Post has a great case study. Read here for more details:
Stewart Thornhill at The National Post has a great case study. Read here for more details:
Contributing experts weighing up the case are Jacoline Loewen, author of Money Magnet and a partner with Loewen & Partners as well as Rick Howard of Zodiac Swimming Camp.
http://www.financialpost.com/scripts/story.html?id=2176257
1 comment:
Jacoline goes two for two on salary and equity.
Salaries are a concern as they are 'out of the owners' pocket but a seasoned, mature, professional will be able to bring more dollars to the bottom line through increased revenues, cost reductions and operational efficiencies (the latter being the biggest area of improvement and opportunity for many family businesses). There are many +++s to having a non family member in a key role; for one it shows that decisions are made for what is best for the business and not necessarily best for the family - something that is often 'heard' on many plant floors. The key is hiring someone that understands the balancing act.
As for sharing equity, everyone wants a piece of the pie. Whether it's equity sharing or profit sharing just take some time to see how others are doing it. I worked for a GE division for many years, it struggled with profitability but needed to move forward. Lack of profitability meant pay freezes, no bonuses, etc - all great motivators (grin). The CEO basically set his profit target added in what he wanted to distribute to the staff and this was his (I mean our) new target. As an organization we hit the target and shared in the spoils - moral of the story; it doesn't always have to come directly out of the family coffers.
Michael
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