The Family I Know----- An Example.

A family into business for generations together has kept their transactions intact. business is a venture not in a way related to anyone. They behave as fellow directors once they enter the boardroom. relationships are at the door. The brother, father, son and uncle exist not in the business centre .it is found greatly in the portals of their own homes. The fights and differences at the personal level do not find a place in the business. They are well without the circle.

This family I quote is a close knit one with three generations into it. They have set their own rules. A member who has turned 65 should retire from business. No active participation is allowed, however much the person is capable or being the only member in a particular branch of the family.The senior most position is given to the person who is the senior in age, mind you less than 65. If a member would turn 65 next year he would occupy the post for a year then automatically go into the pavillion. If there are no members above 60 and the available member is only 45 and the rest are above 65, this person takes yup the mantle. he could remain in the top for another 20 years. A way lucky,as he would have the longest slot, a way unlucky as he has to bear the brunt and responsibility for 20 years. Well, that is the rule and the way they follow it makes me put my finger in my lips and exclaim Hurrah!.

This family also has formulated one more clause. That is the most important. The females of the family are never allowed to participate in the management of the companies.  However, they could involve themselves in charities and educational services which the family runs under a trust. The women are thus occupied and their mind does not juggle and frame schemes to overthrow one another.

I admire this family's foresight and idealism. They have gone a long way. They would ,

for sure, if they keep up the rules would reach the slot of excellence in no small terms and time.

Could Family Business last Long?

Could family business last long?
Yes and no.

Some businesses have lasted for generations. Others have disappeared very soon.

To businesses to last we have to straightforward, transparent and sincere. If we think it is the entire family that is going to be benefitted, why should we work hard the very thought would dissipate the spirit and disintegrate the business. If one considers it as a business and he be the executive who has been appointed to take the company forward, then the company would ideally grow. He could take the required perquisites.

To business to disappear, you need not do anything wonderful, just start a controversy sit aside and watch how it brews and how it flares up. The tempers would fly, heated it would become and finally a division would take place.

Further swindle the money from the common pool, show loss in the business not once but continuously the business would collapse.

moreover ask the members to contribute to the company to set off the losses the business would ultimately close.

That is the end of the

Family Business.

Success In Family Business

The success of a family business lies in the unity of the family. This is the most vital part in running
 a concern purely with the family members on board. If the faith in the management gets diluted then the crash of the venture is well predicted. No amount of patch up would then result in a smooth execution.

How could this unity be preserved?

 This should be thought of with great deliberation. Unnecessary interference by the family members should be restricted. those on board should evince a keen interest in the management. They should not sleep for a while and wake up all of a sudden then come up with ideas. This would disrupt the peace of the managerial environment. A watch and go through procedure should take the priority. Intercepting each and every move should not become a practice. A check once and a while, a verification at random and an insight into what is happening should be the motivation The peep and a peek should be avoided to ensure a hurdle free running of the business.

the monthly meetings should review the scenario Then the yearly ones should be attended without fail y the directors. Issues, if at all require attention should be taken into consideration. The queries pertaining to the workings should be raised then and there. Answers should be sought. If there is a dissatisfaction then the chief should come out with a revision and then submit the annual returns to the departments The profits should be divided and dividends should be announced. The family should be impressed by the performance and should also get the maximum benefits from the company


If these are followed to the exact, then the business would prove successful.

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The Concept Of Family Business

The concept in family business is to hold the ventures together under a family's head. The liabilities and assets should be well within the reach of the family. Transactions are to be transparent. The man at the helm should be genuine and should favour none.

If there arises a misstep then the business would suffer.It should be a tread with caution, a balanced walk on a rope The policies should be discussed.  The periodical meetings should be held. The implementation of the policies should be done as per the schedules. Not any way in a hurry. A  free hand should be given to the chief executives when they have to act on an urgency or an emergency.

So any crossing or counterchecking should not be the case. The suspicion should not find  the

 way. If at all it arises then it is a total disbelief in the management. This exercise should be averted. Only sincerity would hold the business. Other flip flop activity would crumble in no time.

That way be the way to run a family business. Of course, the top level management could draw a salary equivalent to their efforts and a bonus for effectively managing the show. An understanding should never be in oral terms. All should be put in black and white and act as testimony to the managerial skill.

The Transformation In Business

The viability in family business being the essential criteria to run it, many families ignore the concept and attach much importance to sentiments. Of course, the family involvement, its reputation do count. Business is for profit. As such the monetary consideration comes into the fro.As times change the perception undergoes a metamorphical transformation.  The orientation also has to change.

 If the core business goes through a hard phase.That has to be considered seriously. If need it has to be set aside, wound up and liquidated or the face has to get a lift. it could be old wine in new bottles or new wine in new bottles. It depends on the circumstances.It banks on the prudence.

The time you make up your mind is the crucial factor. If dilly dally then the business would eat you up. Procrastination should not be there. The moment you decide the same moment you execute. Then you save money and time. 

That is not the end of it. With the realized money go in for a catch. A business that would earn you 

 revenue and would be lucrative.You should have done the homework earlier.A quick action and a swift transformation would yield benefits.

 

Pawn Shops.

The Family business has many facets to be considered. One being the seniority. The other the capacity.
Looking into the third factor the viability which I feel is most important in business. Just because it has been handed over to generations it is not the best. It was working at one point of time. it would have done pretty well. Now, times have changed so does the outlook.
I know a family which was doing very well in money lending. The father did from his village lending out money to his relatives for a decent interest. he made money and lived comfortably. his sons moved out to a town nearby. All the four of them had set shops. Each one advanced money against the security which would be in the form of land, jewels and materials. They made huge profits.

it happened one day, the first son was alone in his house as his wife had gone to a temple some 300 kilometres to participate in a function. The maid had gone home. The man locked his door and went into his bedroom. Caught unaware a man bounced from nowhere, overpowered him and stifled him to death. The burglar took all the pawned valuables and made way quick. The next morning the maid came, She saw the house open. She called the neighbours and all went in to see the man deal with a pool of blood around.

The wife rushed back and the rest is history. The viability comes into the scene. Pawn shops and their likes were prominent in ester years. As the days have advanced,

people are not so much inclined to these old age business. They go direct to the banks and raise money pledging security. it is far more safe and cheap too. The pawn shops and their gold have become obsolete.. The business model is outdated. A reformation should take place for such kind of business to prosper.

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The Top Executives In Family Business

There arises an issue in family business,as who has to preside over. Seniority is the outcome.
 How far seniority works? Does it not depend on efficiency? Does it not rely on exposure? Does it not call for literacy? Many and many queries crowd my mind as I deliberate on the subject of Family Business .

The senior most member of the family is the one who is older in age. Well, if this man lacks all the basic qualifications, is he still eligible to take the reins?If at all he his given an opportunity he does not perform what would happen to the business/

If it is circumventing around the landed properties, not much harm could be done. If it is encircled by manufacturing industry then acumen is very essential. Now this senior member slips and fails what would happen to the industry?

Analysing all these possibilities, it is the man who is shrewd, who is genial, who is genuine, who could handle the affairs be offered the top post for the industry to flourish.

Will the family hierarchy give way to this new clause