3 tips to jump-start your family business
It is amazing to see family businesses being the backbone of Asia’s economy. With 85% of businesses in Asia being family owned, family businesses represent the full spectrum of Asia’s business landscape, ranging from small businesses to major corporations. In fact, some of the big Asia companies including Samsung, LG and YTL are family owned and controlled.
Despite these strong economic stats, the survival of family-owned businesses is less optimistic. Only 30% of family businesses survive into the second generation of ownership, 12% into the third, and a mere 3% into the fourth, according to the Family Business Alliance.
With all of this in mind, it is important to understand what family businesses can and should do to ensure their longevity and success. What is the secret to balancing a family business’ traditions and history with the changing business landscape of today?
Don’t compete where you can’t win
In the face of big-box competition, any kind of business especially small family-owned business is in no position to compete on price. Consider your own strengths. One of the differentiating factors of a family business is its rich history. For example, your customers will appreciate the signature warm greetings that they’ve come to love all these years.
Maintain authenticity in everything you do
In whatever you are doing, it’s vital that you keep the authenticity of your brand. Even if you go into a partnership, you must ensure that the history of the brand lives on. As time goes on, you may need to evolve your business to keep up with the changing market but that doesn’t mean your brand needs to change. As long as you maintain that authenticity, the brand will continue to be remembered.
Use technology to level the playing field
When a family business is handed down to the next generation, one of the first areas that would be looked into for improvement is technology. In order for the business to keep up with the changing times, it is vital to have a back-end technology that is ready to scale. If the system in place is still running on ageing hardware, the cost to keep it running or upgrading it would be very high. This will hinder the growth of your business and your ability to compete with emerging businesses.
Once a scalable system is in place, your business will be able to expand quickly. Overseas expansion would expose your family brand to a wider audience. Unfortunately, this will also pose new challenges in the shape of balancing the books, taxes and currency, just to name a few. Therefore, you’ll need a system that is capable of juggling all of the daily operations for all of your subsidiaries and compiles it in an easy to understand interface.
Another area for improvement is sales channels expansion. Family-businesses are built on the conventional brick and mortar shops but in order to increase the reach of your products, e-commerce should be considered. Having an online store will not only increase your brand’s awareness but also alleviates the burden on the sales team. You will no longer need to rely on customers coming to your physical shop. Instead, let the customers go to your virtual shop online.
NetSuite is capable of managing all of the above including your financials, customers, inventory and order data. The number one cloud ERP software scales up easily as your business grows. You can consolidate all of your subsidiaries in one system via NetSuite OneWorld. To manage your e-commerce, NetSuite has SuiteCommerce that handles customer, orders, inventory and other critical business data. Since it is in the cloud, there is no hardware to maintain and it is accessible anytime, anywhere.
Technology to a family business is the means to levelling the playing field. While most family businesses will not be able to match the size or scale of the Amazons of the world, they can match the pace. We encourage family businesses to take a second look at your technology systems and ask yourself if they are a hindrance or a tool.