Relying on Old Boys’ Network, “Connections” & Past Relationships

This week, I’ll share an extract from our *complimentary booklet,

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The 9 Most Common Mistakes Family (& Non-Family)Businesses Make That Prevent Them From Achieving Their Full Potential… And How YOU Can Avoid Making Them

Mistake #3: Not Having a Systematic Way to Grow the Business, Relying instead on “Old Boys” Network, “Connections” & Past Relationships

“The first thing dad did when I joined his business to head the sales division was to introduce me to his old boys network; most of them also run family businesses and many are run by our relatives. While dad and his peers have immense respect for each other, I noticed immediately we cannot rely on this network for long term growth. Some of these businesses are stagnant like ours due to over reliance on the same old boys’ network. The rest are either in transition being professionalized by the younger generation, or they have already completed the handing over process. Those who are stagnant will not be able to provide us the extra business while those in transition or completed their transition will judge us by merit and not past relationships. How do I tell dad?”

Relationships or ‘connections’ are important in family businesses. Business is secured through a complex network of goodwill, favors, mutual obligations and personal relationships. Often, opportunities are only available to insiders of the old boys’ network. Favors are given and reciprocated. Credit is given without much paperwork, reputation is enough as guarantee.

(For non-family businesses, a similar situation occur when the business owners and their key management team have been running the business for a long time, establishing relationships and relying on those relationships for future sales, leading to stagnation and lack of new sources of leads for the business.)

Though still a very dependable source of business, as the market gets more competitive and relationships diluted by the entry of younger generations, connections can no longer be the only source of business. Don’t risk being left behind as others start to evaluate your business on more than past relationships.

Start with building the foundation of the business making sure it can deliver consistently. Building the foundation also means everyone should master their roles. Having a solid foundation allows you to move on to identifying a niche for your products or services.

Niche is about being able to compete on more than past relationships alone. Your niche can be anything and may be based on areas such as quality, speed, reliability, safety, customer service, back-up service, convenience, image or guarantee.

Once you have decided your niche you should redesign your business so that the business enhances your position and ownership of the niche. It is worth spending some time developing your niche as this will form the basis of your marketing and is a precursor to the next stage – building the systems that allow things to be done consistently by any team member.

By having these things in place, you can now grow your business by growing your team and teaching them to execute the system.

Have a profitable week ahead!

The Familybiz Works Team.

ps: If you own a business in Malaysia, register NOW for our FREE Business Optimization Clinic, valued at RM750. We guarantee you will get at least 1-2 ideas you can implement immediately, even if you do not engage our services. 

Only 10 sessions every month for qualified business owners. Claim yours today!

*If you are a family business, request for your copy of complimentary booklet when you register for your Business Optimization Clinic, only successful registrants will receive a copy.

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