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Small Business Digest


Managing a Family-Owned Business To Large Scale Growth

Family-owned businesses make up 80 percent of all business enterprises in North America, 60 percent of U.S. employment and 78 percent of new jobs nationwide.

Although these are impressive statistics, there is an art to growing a successful family-owned business. A small donut shop turned into a $45 million company; Sugar Bowl Bakery today is a custom bakery in retail and white label divisions, with Madeleines being its best-selling product. Through its growth, Sugar Bowl Bakery has demonstrated effective navigation of common family business missteps.

“Be extremely patient and strive for open communication throughout the family and the business,” CEO of Sugar Bowl Bakery, Andrew Ly recommends. “Prepare to be in for the long haul to guide future leaders, even if they aren’t family.”

Below, Ly provides his top five tips for managing a family business and ensuring continued company success.

  • Family member vs. non-family members – Do not give family members an easy pass. Strive to treat all employees fair and equally and never separate family members and non-family members. At work, everyone is an employee.
  • Keep all employees on the same page – Develop a clear mission statement and outline each employee’s role and responsibilities. It is important to not only define these responsibilities, but also hold each employee responsible. Come up with an action plan when expectations are not met.
  • Gain experience elsewhere – Family members should gain at least five years of experience outside of the family business. If they choose to return, give them an evaluation prior to hiring.
  • Family is not a business issue, just as business is not a family issue – Establish clear and healthy boundaries between family and business. In other words, don’t address family issues at work and don’t address business issues at home.
  • Promote based on skill – Someone will always emerge as a leader. If that person is not a family member, be very assertive when deciding whom to promote.

For Ly, managing a successful family business is a sometimes a struggle and always a constant learning experience. In his role as CEO, he has trained himself to recognize the talent and integrity of others, but would not be able to do that if he didn’t get to know his employees. Ly reveals his number one priority in his organization, “The key to managing a family business is open and honest communication. For example, I walk the floors of my plant every day not only to ensure the quality of our desserts, but also to make myself available to all employees. Transparency is of the utmost importance to keep company culture fair and employee moral high.”

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