The COVID-19 pandemic has shaken the economy of many countries, caused massive unemployment and has brought many challenges to people in everyday life. Family-owned businesses have had their share of struggle in the pandemic as well. With the many complexities and needs of family businesses, they need to learn how to adapt to the pandemic to keep themselves afloat.
How Family Businesses Have the Edge Over Other Businesses
The real strength of a family business lies in the beauty of its priorities. A family-run business will always think in terms of its future generation, reputation and legacy. It will not merely focus on profit but also think very long term. It is capable of greatly sacrificing and inconveniencing itself in the present for the future of its business. This is because there is great sentimental value and collective family effort in the business where the business has been handed down from generation to generation.
However, these are different times we live in with more complex systems and needs in place, especially during the pandemic. Hence a family business needs to adapt to the needs of the hour fully.
What a Family Business Must Now Do
Become More Open and Innovative
It is common to see family businesses being run in a traditional fashion. And so, it is important to upgrade the style of operating the business and consider innovative changes. For instance, a family business will find it more worthwhile to consider handing over a degree of control and placing trust in those who work for the business but don’t belong to the family itself.
It is important to have more effective communication, dialogue and use platforms like Zoom. Now is the best time to reconsider many of the working practices and processes and work smartly and aim for more digitalization and speed.
Work on brand image
Work on the brand in a more refreshing manner: Family businesses must continually work on their brand. The main advantage that family businesses have over other forms of businesses is their ability to connect deeply to the audience. Hence, it is helpful to communicate a brand story and connect to the customers on an emotional level. Many businesses have now changed their ways of approaching consumers.
The pandemic has brought a change in the lifestyle and mindset of the consumer. Priorities of people have shifted, and so, the family business must cater to this change effectively. It is important to ask questions like what the company should look like and how to make the most of this situation.
It is important that family businesses ask themselves what kind of audience needs to now be targeted and what type of product or service will benefit the consumer the most, and how is it possible to know this information. It is also essential to know where to allocate the capital effectively and make the best of it.
Family businesses usually have an element of sentiment where non-economic goals and dreams are given great emphasis. With these uncertain times looming over most economies, it is vital to incorporate a more pragmatic approach to the business goals.
An admirable characteristic of any family-run business is that there is a deep respect and loyalty to the values laid down by the earlier generations. These values are apt for the pandemic as they cater to the interests of the people and support the communities effectively.
Family businesses can help their employees by repurposing and giving them different tasks instead of subjecting them to unemployment. Hence, family businesses can remain solid in their governance and leadership abilities more than other forms of businesses that are purely driven by economic interests.
It is also important to bring the younger generations more into the forefront of the business as their minds are better equipped to handle the challenges of the modern world, especially with the increasingly growing technological developments that are taking place.
Older generations in families may find it challenging to adapt to the ever-increasing changes where traditional practices take a back seat. For instance, the banking industry doesn’t function in a conventional way anymore. The functions of banks have grown to such a monumental extent that they now outsource their atm services to service providers.
Family businesses may also benefit from outsourcing some of their work to focus on more core business functions. These services are cost-effective, and they can greatly help a family business manage its cash cycle more effectively. Most family businesses are now seeing a great need to preserve cash to equip themselves for future challenges.
Family Businesses have a great flexible structure that allows them to shape themselves as per the needs of the situation. After all, this is how they have managed to exist over the course of many generations. They can be committed to their stakeholders and exercise social responsibility because of their firm foundations.