Money Clinic Session (March 27, 2019)May 25, 2019 at 6:38pm
It's our Entrepreneurship talk on Wednesdays and we would be talking about the role of family.
May 25, 2019 at 6:40pm
Role of Family
A lot has been documented about the importance of the entrepreneur’s access to financial capital, as well as educational achievement and progress, to the enterprise’s ultimate success. The family background of an entrepreneur is often an unrecognized aspect of success. Few facts regarding the role of family for entrepreneurs are −
● Two to three times more business is owned by the children of industrialists than those whose parents don’t own a business. So it is pretty clear that, business ownership runs within the family but the question here is does it lead to success?
● Entrepreneurs working in their family business before starting a business of their own, tend to be 10 to 40 percent more successful than they would be otherwise.
● The would-be entrepreneur gains valuable experience through informal learning and apprenticeship that occurs while working in a family business.
● Who can teach us better than our own parents? A brilliant way of learning the “name of the game” of running an own business is first working in the family business.
● Family business is a golden ticket for family members to hold human capital linked to operating a business. It is not necessary to gain this experience in the same industry, probably because basic business experience is what counts.
The major scope through which families shift their business success across generations is by working through experience. However, a major drawback is the cycle of low rates of business ownership could be easily broken and relatively worse business outcomes could be passed from one generation to the next. It is very important to address the lack of opportunities to work in family businesses.
We would also be Looking at growth strategies.
Growth Strategies in Business
Small companies or businesses always look for ways to grow their business and increase sales and profits. There are probable techniques that companies must use for executing a growth strategy. The technique used by a company to expand business is highly dependent upon its financial situation, the competition and even government regulations and policies.
Some common growth strategies marked in small scale business are:
● Market penetration
● Market expansion
● Product expansion
Breaking it down: Market penetration
One of the growth strategies reported in business is market penetration.
A small company uses a market penetration strategy when it agrees to market existing products within the same market. Increasing market share is the only way of growing through existing products and markets.
A typical example is: you are into the fashion industry, and what is in vogue is the "ready to wear line". How do you get to penetrate this industry that would make you standout and have a major share in the market.
What is that strategy you have in place? What would make your product or even the already existing readytowear line stand quick and your brand is known for that unique offering.
The role of family is in various aspects: The aspect of the extended family: you been born into an existing family business, or having parents who are/were entrepreneurs.
Second is the role of your immediate family. As providing financial, technical, moral support. The role of the family cannot be over emphasized. What role is your family playing to support your business. Either your spouse, children, siblings? In what way?