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Small-Business Smarts: Values of Small and Family Businesses
By: Glenn Muske, N.D. Small Business Development Centers - 02/17/2017

Family businesses are a significant number of all small businesses. And while using many of the same tools to operate and manage the business, family businesses have some unique challenges that take additional planning and management for them to be effective.

One such differentiating aspect between family businesses and small businesses comes from the difference in how each system operates. Small businesses are organized for profit and growth. The relationships within the businesses are more impersonal. You will often find written roles and policies. Employees are evaluated and promoted based on performance. People enter through a hiring process and leave because of retirement, promotion, or moving to another company.

Family businesses certainly have the profit motive in place and often the growth goal as well. And many have some or all of other policies and procedures we would expect in any business.

But, family businesses also have the family system to consider. Thus, a family business may include objectives such as the development and support of family members and strengthening family relationships. There may find informal roles and role expectations and reward may be based on family status and not performance. Succession and business transition may also differ in a family business.

Not only are the values different, but family-business owners more often talk about balancing demands between the two systems, the dynamics of each, and how roles change for people as they step back and forth between the business and the family.

As you might expect, these differences create conflict. The level of conflict will vary based on firm age and size as well as how the owner sets up and manages the business.

Developing a successful, sustainable business comes from identifying and including values into the culture, policy and procedures of the business. In family firms, it also means including the differences in business and family management.

Families can bring a great deal to the business. They also bring challenges, but acknowledgement of the differences and planning can make opportunities out of challenges.

For more help, visit our website, If you would like our monthly newsletter of tips, just send me an email at

More information on starting, managing, and growing small business development can be found at the ND Small Business Development Centers.

In addition, the Small Business Administration and the Service Corps of Retired Executives are available for assistance. Finally, more resources can be found at Extension offices,, and from various state agencies.

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