About 70 percent of family businesses never make it past the first generation. Mitzi Perdue is uniquely familiar with the challenges of passing on a family business. Perdue was born into the family that created Sheraton Hotels and then married into the family behind Perdue Chicken. Because of this expertise, Perdue recently wrote a book specifically about family business ownership, called “How to Make Your Family Business Last.”
Listen to an interview with Perdue by Small Business Trends’ Ramon Ray in the latest installment of our exclusive Smart Hustle Report.
Tips for Passing on a Family Business
Perdue’s book contains roughly 60 tips about passing on a family business. She shared a few of those insights with Small Business Trends in a recent email interview. Here are five tips for families looking to pass a family business from one generation to the next.
Know What to Look Out For
There are many different reasons why specific families might not be able to pass a family business to the next generation. But there are a couple of them that stand above the rest.
Perdue explained, “A large part of the reason many families don’t make it are either family quarrels that got out of hand or substance abuse problems. If you google ‘family business feuds’ you can get almost half a million hits in less than a second.”
Make Relationships a Priority
Perdue also said creating a positive family culture can contribute to strong relationships where feuds and substance abuse problems are less prevalent. The biggest part of this is just to make those family relationships a major priority in your life. It might sound simple, but it’s something that’s overlooked far too often.
To illustrate this point, Perdue shared a story of a lunch gathering she recently attended with other members of prominent business families. The vast majority of attendees there shared stories of how much they struggle with their siblings and other family members. However, Perdue has made a point of prioritizing relationships with family members, and has had a much different business experience because of it.
She said, “The experience reminded me of something I had recently read. Relationship problems are the reason that 70 percent of families don’t make it to the next generation. The lunch ended and I was left wondering why it was that the two families I’m closest to are so different from what seems to be the norm. My family of origin is the Henderson family, and we began in 1890 with the Henderson Estate Company. This was the forerunner of the Sheraton Hotels, which my father co-founded. We’re about to have our 127th reunion, and in surveys, family members often say that the family reunions are the most joyous and meaningful parts of their lives. My family by marriage is the Perdue family, and the Perdues have been getting together regularly since Perdue Farms started in 1920. My Perdue family members are not just in-laws, but some of the best friends I’ll ever have in life.”
Offer a Helping Hand
Creating a supportive family culture also means offering a helping hand to family members who need it. This is especially important when dealing with substance abuse or similar issues. If you can recognize these issues early and support your family members to seek the help they need, they have a better chance of overcoming those issues.
Share Family Stories
It’s also important to help family members actually feel connected to your family and its history. That means sharing stories about your family members and past with younger family members.
Perdue said, “There’s an enormous amount of very current research that shows that the more family members know their family stories, the higher functioning the family is. By higher functioning, I mean the kids are less susceptible to substance abuse, they stay in school longer, get better grades, are less likely to get in trouble with the law, and are less likely to have babies before they’re adults. The reason for the connection between being high-functioning and knowing your family stories? It has to do with identity. We are the stories we tell ourselves.”
“An individual who is fortunate enough to have a family that spends time together and in the course of that time, to talk about where they came from and what they value and ‘what it means to be us,’ has a better chance of having a positive identity that can resist the negative influences that can surround a young person,” she added.
Eat Together as a Family
You also simply need to spend a good amount of time together as a family. Having regular family dinners is a great way to accomplish this goal.
Perdue suggested, “Have five or more meals together as a family. According to Joe Califano from Columbia University’s Center on Addiction and Substance abuse, this is one of the most protective things you can do to prevent substance abuse in the younger family members.”