Family businesses thrive with careful focus on transitioning through generations
This piece also appears in the July edition of the Chamber News.
They might be the ultimate experts in work-life balance.
Mom or Dad doubles as boss, and the dining room table could just as easily become the boardroom table for hundreds of Sioux Falls-area family-owned businesses.
Navigating those unique dynamics can be as challenging as it is rewarding.
Managing to do it for multiple generations has proven impossible for all but a select few.
Several Sioux Falls-area businesses aren’t just surviving but thriving. Prairie Family Business Association, which serves more than 200 businesses in five states, calls them solid models that others can emulate.
Stephanie Larscheid
“The trends I notice about the businesses featured are that these families are dedicating time to working on their business rather than only in the business,” executive director Stephanie Larscheid said.
“They are in peer groups that help them with critical business and family decisions. They seek out experts and build an effective advisory team around the family and the business.”
Most families find that the rewards of working together outweigh the challenges, she said, and their success is reflected in the broader community.
“Family businesses are critical to our local economy and the economies of communities throughout the states we serve,” Larscheid said. “The survival of the business throughout generations will directly impact the community where the business resides.”
Here’s a look at several longtime family businesses marking milestones and transitioning to new generations.
https://siouxfalls.business/nelson-nelson-cpas-thrives-in-third-generation/
https://siouxfalls.business/pride-neon-sign-celebrating-70-years/
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Expert advice
People learning about Prairie Family Business Association for the first time often are in for a few surprises, said Larscheid, the executive director.
The association was formed 25 years ago out of the Sons of Bosses organization.
“People are surprised by the programs, education and resources we offer family businesses,” Larscheid said. “Businesses often say, ‘We wish we would have heard of you years ago.’ ”
Some of the most common questions the association receives from family businesses are:
Question: How do we start a conversation around succession? Where do we begin our succession?
Answer: Start with a family meeting, either with or without an outside facilitator.
Question: Personality challenges and dynamics are impacting our family business. How do we address this?
Answer: Communication is key. Assessments can be a powerful tool for leadership development and personality changes.
Question: Mom and Dad are trying to exit the business, but they keep meddling in decisions that have been turned over to the next generation. How do Mom and Dad find their new role?
Answer: The creation of an advisory board or board of directors can be a powerful exit strategy. This allows Mom and Dad to continue having a role in the business without interfering with day-to-day decisions and management.
As baby boomers retire, Prairie Family is noticing:
- The next generation can struggle to get a handle on everything that is in Mom and Dad’s mind. Families that succeed at this are setting aside regular designated times to talk through business decisions and strategy.
- Transition of financial management and decisions are key in the transition process. Sometimes, this is the last information relayed to the next generation because the exiting generation either doesn’t want to give up control or they don’t want to fully disclose the good and the bad of the business’ financial situation.
- Successful transitions happen when Mom and Dad have a plan for retirement. Travel, hobbies and nonprofit organizations are great ways for parents to fill their time.
- Managing a growing business is a challenge for the next generation. The exiting generation built the company from the ground up, and now the next generation is tasked with managing the success and growth. It’s a different business today than it was when Mom and Dad were growing it.
To learn more about the association, visit fambus.org.
