Starting a Family Business? Avoid These 5 Mistakes in Your Continuity Plan

The following is excerpted from “The Harvard Business Review Family Business Handbook: How to Build and Sustain a Successful, Enduring Enterprise” by Josh Baron and Rob Lachenauer (Harvard Business Review Press, 2021).

It may seem counterintuitive to those who are neck deep in building their business, but if you want to build an enduring legacy to pass to the next generation, it’s never too early to start your continuity planning.

Even with good intentions, many owners find it difficult to plan their own eventual transition from the business that has become part of their identity. But delaying or poorly planning your transition can wreak havoc on the business (and the family) in the long run.

A BCG study of more than two hundred Indian family businesses found a “28-percentage-point differential in market capitalization growth between companies that had planned transitions and those that had not.” The study concludes, “An enormous amount of value is destroyed by unplanned transitions, with potentially catastrophic consequences for the business.”


StartupNation exclusive discounts and savings on Dell products and accessories: Learn more here

While there is no correct way to make the transition from one generation to the next, we have seen five main approaches that are likely to fail. If you identify with one—or more—of these scenarios, you are likely to be headed off the continuity cliff.

A problem patriarch or matriarch

This type of leader can’t let go. Patriarchs or matriarchs rule all aspects of their family business with an iron fist. Their hardball behavior, which led to their business success, is applied to the next generation, which finds it impossible to thrive under an iron-fisted senior leader. Because of this person’s oppressive behavior, the members of the next generation are incapable of leading the business or are so hurt by their previous experiences that they have no interest in continuing the business. Often, after the domineering leader leaves, they sell the business.

The one-size-fits-all fallacy

Governance, roles, and processes that worked brilliantly in one generation can be a disaster in the next. Even with good intentions, the senior generation can set the younger generation up for failure by maintaining rigid leadership roles without allowing the younger group to consider approaching leadership differently. Each generation brings different interests and skills to leadership—and the business itself may need different leadership skills. It’s a mistake to assume that what worked for one generation will be right for the next generation, too.

Ruling from the grave

Owners can set the rules by which the next generation will work and own the business together, often through formal vehicles like wills or trusts or through handed-down cultural expectations. The goal is often to protect what you have created and to help the next generation avoid mistakes. However, these formal approaches often backfire. Ruling from the grave removes the autonomy of the next generation to chart its course and to respond to changing circumstances. Trusts are very difficult to undo, and even cultural expectations are hard to shift.



The chosen one

Many families have a cultural tradition that even when ownership is shared, the eldest male is put in charge of the family business. Sometimes, this person is given a greater ownership stake in the company (or all of it), and sometimes the power comes from being tapped on the shoulder by the previous generation. This tradition can help avoid battles over succession, since everyone knows their role at a young age. But more often than not, we have found that designating a successor at birth causes more problems than benefits. Even if it’s not spoken aloud, everyone will recognize that the chosen successor may not be the best candidate for the job—that this person simply has the luck of being born first. This approach also places great pressure on the “chosen one.” Meanwhile, the rest of the family often feels disengaged and resentful.


Sign Up: Receive the StartupNation newsletter!

All for none, none for all

When the current owners disagree on priorities, the individuals often want to compete with each other rather than collaborate. One way this competition happens is succession by attrition. For example, a “last one standing” provision in a shareholder agreement states that if, say, a company has three shareholders and one dies, then the two remaining shareholders must buy the shares from the surviving spouse at a discounted price. If a second shareholder dies, then, again the remaining shareholder is the buyer. The last person standing now probably owns all of the business, but because the business is likely to be heavily indebted, the last person will probably need to sell, too.

Maintaining family ownership over the years is a complicated endeavor. It requires making decisions that will reverberate for years to come and that are based on imperfect information about the future (e.g., which of the next generation will be the most qualified to lead the business?). These decisions are steeped in meaning, connecting to issues of fairness (do I treat my children equally?) and identity (what do I do after I have exited from my life’s work?).

To make a good transition, you need a continuity plan that maps out the path from the current generation of ownership to the next. Though the current owners will make the final calls, the process requires cross-generational collaboration skills. Everyone needs to understand how this transition will work. Family empires are consolidated or squandered in the transfer of power to younger generations.

We can’t state this strongly enough: a planned transition is far better for both the business and the family in the long run.

The Harvard Business Review Family Business Handbook” is available now and can be purchased via StartupNation.com.

The post Starting a Family Business? Avoid These 5 Mistakes in Your Continuity Plan appeared first on StartupNation.

StartupNation

Anyone here has a cybersecurity company? I’m starting a pentest company and would like to gain some knowledge on operations.

I would like to add that I have already formed the company but haven’t done the website, demo report, sales and customer accusation.

While I can handle the website and demo report by myself I would really like some guidance on selling my services(markets, people, platforms) and how to acquire customer.

If anyone here is generous to donate their time, it would be very much appreciated!

Thanks in advance. Just comment below so I can send you a meeting request.

submitted by /u/Whyme-__-
[link] [comments]
Startups – Rapid Growth and Innovation is in Our Very Nature!

Interviewed for full-time job, received a job offer but asked to come on board as a contractor for a few weeks before starting full-time role. Lots of red flags coming up – is this normal?

Interviewed for full-time job, received a job offer but asked to come on board as a contractor for a few weeks before starting full-time role.

Many red flags showing up. For example: the contractor contract stipulates the need for several years worth of liability insurances. And things discussed in the interview/job description (equipment and equity) have evaporated. After questioning the contractor contract, and liabilities, I've now been told that they are not worried about having a contract in place.

They seem really desperate to get me on board and aren't really addressing my concerns. I haven't signed or started yet.

I know startups can be chaotic, but is this switch and bait normal? Is it normal to come on as a contractor? Is it normal not to bother with a contract? I feel like the company has mishandled this, and either they don't know what they are doing, or they are out to screw me.

submitted by /u/beyond_disillusioned
[link] [comments]
Startups – Rapid Growth and Innovation is in Our Very Nature!

Starting an accountability group to help me and us succeed.

Starting an accountability group to help me and us succeed.

—————————————————————————————————————————————————————-

Let me know if you're interested.

submitted by /u/paretomember
[link] [comments]
Startups – Rapid Growth and Innovation is in Our Very Nature!

As a single member LLC starting an internship program, how should I proceed?

I run a single member startup in Texas with no employees (only contracted companies and services). I am looking to start an internship program in partnership with a university.

What is the proper way to proceed with this?

Also, what is some general advice to help the interns and the university get the most out of the program/partnership?

submitted by /u/runningwaterss
[link] [comments]
Startups – Rapid Growth and Innovation is in Our Very Nature!

I am interested in starting a business, but when I simulate expenses vs revenue it seems to be improbable to personally profit. Any ideas?

I am exploring opening an agricultural technology company. I am literate in mathematics/statistics so I have gone about calculating what I believe would be a fair simulation(albeit an overestimate) of what is the Initial Overhead, Monthly Expenses, and Monthly Revenue. The issue I experience is that at the end of the month, I have calculated my monthly revenue to be $ 19518 and my monthly expenses to be $ 17646, leaving $ 1872 "profit" unaccounted for. Each operation will cost roughly $ 200k overhead to set up(again, likely an overestimate), and is directly scalable.

I am unsure if just given these macro numbers I can justify dedicating the time to pursue this venture. One place I see that can be trimmed is that the expenses calculate in the payment of an Agricultural Scientist a contracted salary of $ 62,000 a year. This could be simplified with automation(which I have planned out in my schedule to personally complete this summer) that would diminish the requisite employee salary for this and subsequent operations to ~37,000 given the price for unskilled labor where I intend to open shop. To me, this does not appear to be a gamble that would net me greater profit than what I could otherwise make risk free by dedicating myself to my own job and intra-business mobility. Am I being totally blind to something?

submitted by /u/Yeet_Me_N_The_Trash
[link] [comments]
Startups – Rapid Growth and Innovation is in Our Very Nature!

If you are just starting out you can probably use these tools to boost your business in 2021. They are free also.

When we started out our budget for marketing was limited so we had to look for ways to grow our business without spending too much so these tools really helped us in achieving that.

Canva

Canva is the most popular graphic design tool on the internet. It’s an online software where you can design images and graphic pictures for social media, posters, ads, business cards, and even reports. While their premium subscription is worth the money, their free option is also very powerful and only lacks a few of the premium features.

Grammarly

Grammarly is an important aspect of all of your digital marketing activities. The messages you are putting out there are important, and you want to avoid common grammar and incidental spelling mistakes. Grammarly is a tool that fixes grammatical errors by providing smart suggestions for better word choice.

It also analyzes your tone so your brand messages can always get the emotional response you want to give to the reader. Although there’s a paid version of this app, the free version includes many of the powerful features and even comes in the form of a chrome extension

MailChimp

Sending e-mails to hundreds of customers manually is a very difficult task. Luckily, you never have to do that again because Mailchimp automation system can help you out in more than one way. It’s ideal for non-tech-savvy people and allows you to design e-mails, group contacts, and even design landing pages for your website. And the best part- this web-based email marketing tool is free.

SEO SiteCheckup

As the name suggests, SEO SiteCheckup is a digital marketing tool that can help you improve your search engine optimization. It checks how search-engine-friendly your website is, and provides suggestions that can help improve your sites like content marketing tips, keyword research, and backlinks. You can also use this tool to check on your competitors and see how you can improve to outshine them.

UberSuggest

Developed by the Neil Patel Company, the basic objective of Uberrsuggest is to help people find the best keywords for their business. However, Uberrsuggest is much more than just a keyword research tool. You can use it to analyze the quality of your backlinks and internal links, find topics for blog posts related to your website, analyze your competition, check traffic sources, and more

CoSchedule

They say that “for every minute spent organizing, an hour Is earned”. Well, CoSchedule is a tool that can help you get many “free” hours. Your digital marketing campaign probably involves a few people from your team, and with CoSchedule they can collaborate and manage the project together. It organizes all of your marketing activities in one place. It’s free to try, but you have to pay for using it later.

Bitly

Bitly started as a simple URL link shortened. But over time, it developed into one of the best link engagement analytics tools. Bitly allows you to gather intelligence about your audience and optimize marketing efforts. It’s super easy to use and offers almost all its features for free.

There are a lot more tools out there but I think these really are the ones that can help you get started. By the way, I have a list of more than 50 tools in excel so lets me know If you need it.

submitted by /u/chrismatters
[link] [comments]
Startups – Rapid Growth and Innovation is in Our Very Nature!

Starting as a startup now we have worked with more than 40 clients, the marketing techniques that brought us here.

Starting a company with close to zero dollars for marketing was a challenge for us. Marketing has been present for ages with various techniques, however, marketing for startups is a little more delicate.

Of course, no marketing strategy can’t be imagined without being digital.

However, there are some digital marketing techniques that are more effective than others, especially for startups. Here is what worked for us:

1. Email marketing, companies who know how to use it cleverly mark a very high return on investment. According to DMA, the average 1 ROI for every 1$ spend in email marketing is 32$ and when you add the fact that 99% of consumers check their email every day there is no place for hesitation.

How to make most of out it?

– First of all, make sure you target right, only people who have expressed interest in your products and are truly relevant should be on your recipient list.

– Second, pay really good attention to your copy. Your message should be clean, clear, and catchy. Support it with a nice design template

– And finally, track your data.

2. Search engine optimization (This is a must)

The competition is harsh, but getting on top can make you more visible to your potential customers.

Set your goals first. Your goals can be higher profit, revenue, or ROI, brand awareness, increased customer loyalty, etc.

Be consistent and post regularly. I expect you to research what your target customers are searching for before you decide your topics.

Blog posts are definitely the most important part of SEO. Over 40% of our traffic to the site comes through our blogs.

3. Pay per click for startups (Google ads)

There are some tricks we have learned over the years for PPC marketing. PPC can bring a lot of irrelevant clicks so make sure you use negative keywords to cut them and save some time. This option allows you to exclude keywords you don’t want to be found after

Next, make sure you monitor your campaign every day. The data analytics platforms provide can be very valuable regarding all aspects of your marketing campaign and you shouldn’t miss it.

However, PPC requires a lot of investment that’s why you need to make sure someone experienced is performing them.

4. Content marketing for startups

I can’t stress enough the importance of content marketing. As it’s important for SEO, it’s also important for you to remain relevant show that you have expertise.

Before you start anything you need to research your target market. Develop buyer personas and find out what they want to learn and where are they spending their time. Then map the buyer journey and create content for each stage.

At the top of the funnel, you should have light and informative content, the next stage should have content with higher value, while the final stage should show the exact benefit your product provides.

What are some marketing strategies that worked for your startup and how? Let me know down in the comments?

submitted by /u/chrismatters
[link] [comments]
Startups – Rapid Growth and Innovation is in Our Very Nature!

Starting an E-Commerce Business in 2021? Keep These 6 Key Trends in Mind

If you’re thinking about starting an e-commerce business, you’re in good company. E-commerce is booming, with sales from last year’s Black Friday and Cyber Monday hitting $ 10.8 billion in a single weekend. And growth is only accelerating: by 2022, the global e-commerce market is expected to reach $ 6.5 trillion.

Not only is the demand for online shopping skyrocketing, but it’s also never been easier to start an online business. Almost every part of running an online business, from sales to logistics to design, can be easily managed through user-friendly tech platforms and software.


StartupNation exclusive discounts and savings on Dell products and accessories: Learn more here

Even so, turning your venture into a successful, revenue-generating company is a little more difficult. To improve your odds, keep these six key trends in mind to start your e-commerce business in 2021.

Pick a niche with growth potential

With an estimated 12 to 24 million e-commerce sites globally (and more being created every day), it is vital to stand out from the crowd. In any business, online or not, the bottom line is that if you try to sell to everybody, you end up selling to nobody. This is particularly true in the extremely competitive world of e-commerce.

Look for niches where demand is growing and carefully target your audience in order to differentiate yourself from competitors. And once you’ve got your store up and running, a great way to narrow your niche or further define your product offerings is by surveying your current customers. Consumer feedback can help you find in-depth information and discover any commonalities among your customers that can help you narrow your niche even further.

Today’s consumers want customization

Tailor-made products have always been customer favorites. In recent years, e-commerce stores have been setting themselves apart by offering customized products within their niches.

Advancements in technology have made it much easier to create personalized products to meet consumer demand. Some online stores have built their entire business on product customization, while others are slowly incorporating the process into their store to enrich the consumer’s shopping experience.

According to a recent Deloitte study, one in five consumers are willing to pay 20% more for a customized or exclusive product, and 46% of consumers say they are happy to wait longer to get their personalized product or service.

Implementing customized products in your online business is a great way to build customer loyalty, generate word-of-mouth marketing, and ultimately drive more sales.


Related: 5 Things E-Commerce Startups Should Focus on for Success in 2021

Consumers expect transparency

It has never been more important for businesses to manage consumer expectations.

According to Salesforce, a whopping 76% of consumers assume companies understand their needs and expectations. For e-commerce brands, a great way to do this is by clearly and explicitly communicating order information. In an Amazon Prime world where products are shipped in two days (and sometimes, the very same day), many consumers expect to receive their products relatively quickly.

As happened at the beginning of the COVID-19 pandemic in the spring and during the recent holiday season, external factors can cause delays in producing and shipping products.

E-commerce brands need to communicate with customers before, during, and after they place an order to address their concerns, including:

  • Addressing shipping delays or any other known issues on your homepage and product pages.
  • Reinforcing those messages during checkout, including estimated shipping and arrival times so that your consumer isn’t frustrated by uncontrollable delays or disruptions in the supply chain.
  • Updating transaction emails. Typically, the two main transactional emails consumers receive are the order confirmation email and the shipping confirmation email. An additional email you may want to consider including is an order delivery confirmation. This notifies the consumer, who is waiting patiently for their order, that their package has arrived.

Instagram is the new Google

If you’re starting a product-based e-commerce business, then you understand the power of Instagram and why it should be an essential part of your marketing strategy.

More and more consumers are actually using Instagram, not Google, to find new brands or more information about products.

According to a survey conducted by Sprout Social, 83% of people surveyed use Instagram to discover new products or services, and 80% use Instagram to decide whether to buy a product or service.

If you’re not using Instagram to sell your product, now is the time to start. Your brand’s Instagram profile has to essentially become your second homepage and may even be more important than the first.

Try these cost-effective and proven ways to transform your brand’s Instagram profile into a steady source of sales:

  • Build out your storefront on Instagram Shopping. With your Instagram storefront, customers can browse and shop all of your offerings across Facebook and Instagram. You can even create curated collections in your storefront to fit with trends and seasons. Your customers may even forget they’re not shopping on your website!
  • Create Reels. Instagram has been testing new interface layouts that incorporate access to Reels from the homepage so users can easily watch videos. They have also been prioritizing Reels in the main feed in order to increase engagement and adoption. While Instagram built Reels to support creators and influencers, even brands that don’t invest in influencer marketing can benefit.

Sign Up: Receive the StartupNation newsletter!

Pay attention to sustainability

As we step into 2021, we will continue to see conversations around the impact consumerism has on the environment.

According to a recent study by McKinsey, 67 percent of consumers consider the use of sustainable materials to be an important factor when they are making buying decisions.

Consumers are interested in sustainable practices and engage more closely with businesses that are socially responsible and transparent with their production and fulfillment processes.

For e-commerce businesses, this could mean incorporating organic, reusable, sustainable materials and methods into their supply chain. Be sure to let customers know the steps you are taking to reduce environmental harm.

Increasing interest in hybrid inventory models 

Many e-commerce brands are testing new supply chain solutions, such as on-demand manufacturing, in order to lower inventory costs, reduce waste, and streamline their operations.

On-demand manufacturing is a process that emerged about a decade ago but has gradually picked up steam in the past few years. Driven primarily by the explosive growth of e-commerce and shifting consumer needs, on-demand is poised to revolutionize the supply chain industry in the coming years.

The on-demand manufacturing market is expected to reach about $ 112 billion by 2024, growing at an astounding 19.8% annually, according to Marketwatch.

With on-demand manufacturing, products are made only when they are needed and in the quantities required. In contrast, traditional manufacturing requires large quantities of products to be made and then stored in facilities until they are ready for shipping.

On-demand is ideal for e-commerce stores because it eliminates the need for inventory, and also allows online entrepreneurs to quickly test consumer interest in new products or designs without taking much risk. Many existing brands (both e-commerce and offline) are using on-demand in combination with traditional manufacturing to expand their product lines or feature collaborations. For all entrepreneurs, on-demand allows them to outsource their supply chain so they can concentrate less on logistics and focus on what they do best—designing, marketing and selling.

The bottom line

Starting a business is no small task. While technology provides many opportunities for creating an e-commerce business, it has also become harder for new and small brands to compete.

Understanding the latest trends can help entrepreneurs find new markets or product ideas, as well as guide you to new methods that can give you a leg up on the competition.

From focusing on niche audiences to implementing product customization to setting proper customer expectations, these trends can help you create a thriving e-commerce business in 2021.

The post Starting an E-Commerce Business in 2021? Keep These 6 Key Trends in Mind appeared first on StartupNation.

StartupNation