President at Bishop-Wisecarver, leveraging 70 years of success to deliver innovative motion solutions for customers worldwide.
I lead a 70-year-old manufacturing company located next door to Silicon Valley. The success of public companies such as Google, Apple and Facebook, as well as thousands of startups looking to go public and make millions, means much of the business discussion in the area is around achieving this kind of growth and notoriety. While that’s great for those companies, I prefer to talk with team members, prospective employees or even students deciding their futures about the many ways family-owned small-to-medium businesses (SMBs) can offer career opportunities and advantages.
With approximately 30.2 million SMBs in the U.S. and with family-owned businesses employing 60% of the U.S. workforce and creating 75% of all new jobs, the combination of the two is an economic powerhouse. The success and vast presence of family-owned SMBs in today’s global economy are prime reasons why we have emerged as a role model for larger companies.
Below are five reasons family-owned SMBs are gaining in popularity with job seekers and are having a strong influence on the ways larger companies are structuring their businesses and what you can learn from them.
1. A Winning Culture
A family-owned business is what it says it is: a family. Employees are treated like family members, and the company culture is driven by collaboration and can-do enthusiasm. I’ve observed that employees are often given more opportunities to advance and grow, have more access to mentors and education and celebrate wins and losses together. The success of the company rides on the success of the entire team. This is more than a poster slogan, and if you use my company as an example, our team clearly knows it. They know their role is important and they take that seriously. They aren’t just a number, and they feel valued. I believe this tight-knit structure is one of the leading advantages that family-owned SMBs have over public or venture-funded companies that are laden with demands and constant pressures from investors and shareholders. Even when facing financial difficulties, treat your team like a family and be transparent, work together to make changes, weather the storm and you will come out the other side even stronger.
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2. Employee Hiring And Retention
In today’s economy, hiring has become extremely competitive. Prospective employees often have multiple job offers and signing bonus options. A smaller family-owned company has a significant advantage when they can demonstrate that they are “in it” for the long haul and have created a culture that cares about and values its employees. Your benefits package should reflect the core value of treating all employees like family. When employees can quickly and clearly see the impact of their contributions, they are inspired to stay. The family that works together stays together. There are multiple employees in my company that have been there 20 or more years, which is unusual in the Bay Area and at this time. People start because they want to make a difference, and they stay because they are able to use their skill sets, grow their skill sets and feel of value to customers and the company’s success as a whole.
3. Customer Relationships
In a family-owned business, the president is often closely involved with customers, meeting with them on a regular basis to understand their pain points and come up with solutions to their biggest problems. Customers are number one in these organizations and by providing a valued and distinctive service experience, family-owned business forge relationships that often extend over generations of leadership. Just like employees, your customers should feel valued. They should also know that if there is a problem, they can talk directly to the president and get an immediate response and resolution to their issue. In an SMB, that treatment goes for all customers, no matter their size or amount spent. For example, I send a personal handwritten note to many of our first-time customers thanking them and welcoming them to our family.
4. Resilience And Agility
Family-owned businesses tend to be nimble and show a lot of grit, allowing them to fight for survival in difficult times such as the recent Covid-19 crisis. They have streamlined processes, fewer layers of executives and an ability to implement changes quickly. When Covid-19 hit, my company came together like any family would, and we have been adjusting our business model as needed for our team, partners and customers. In a matter of hours, we were able to make the necessary changes to continue as an essential business. We have continued to respond to shifting events and regulations to support our employees with PPE, maintain 96% on-time deliveries and maintain our family culture with two-thirds of our team being remote. Having resilience and flexibility enables you to help customers in faster and more meaningful ways so that their businesses don’t suffer.
Family-owned SMBs are scrappy. We are always looking for the best way to accomplish our goals and make things better for employees and customers. Sometimes this means creating entirely new product lines or customized products that work for an individual customer but are often useful for future projects. SMBs also like to innovate by using technology that improves or eliminates a manual process or bringing in cutting edge technologies such as AI or machine learning that can help the business understand data to make better decisions. Without layers of bureaucracy, you can also pivot and adopt these technologies quickly. Clearly, smaller doesn’t mean less technical or less advanced. It means always watching and learning and taking the chance to try something new.
Family-owned SMBs are often overlooked for the insights they can provide to larger businesses. They aren’t always as flashy as some of the bigger names, but they offer a blueprint for success that larger companies can try to emulate. Being a role model is a big responsibility, but smaller family-owned companies are proving they are up to the challenge.