Wyoming Entrepreneur Blog

Why Family Businesses are Special Today

Family-owned businesses are stable and optimistic, even in times of economic uncertainty. A recent national study by Kennesaw State University, the American Family Business Survey of family-owned businesses, studied the strengths, challenges and changes since a previous study done in 2002. It found that family business owners:
1 | Are optimistic about future growth - Even during some generally depressed business conditions, family business owners express optimism. Figures confirm that family businesses are better able to weather economic hardship and stabilize the economy than their non-family counterparts.
2 | Lack a sense of urgency about retirement and succession planning - Family businesses face some significant succession challenges. Over forty percent of business owners expect to retire in the next ten years, but many are less certain about retirement. Almost one third have no plans to retire, ever. Nearly another third report that retirement is eleven or more years away. This means that many owners plan to die running their business, which is not beneficial to their family, the business, its employees or its customers. Furthermore, nearly one third have no estate plan beyond a simple will.
3 | Select women as leaders - There has been an almost five-fold increase in the number of women leaders in family businesses in the last decade, far more than the increases seen in non-family businesses. The trend indicates that increased female leadership of family businesses should continue.
4 | Hold themselves and their employees to a higher ethical standard - Since family businesses are family and relationship oriented, they operate more ethically. Family owners have a major influence on their business and their values are emphasized in the business. Family orientation seems to translate into more ethical behavior and the resulting actions contribute significantly to their family’s identity in their communities.
5 | Expand on traditional management - There is a misconception that due to the relational nature of family businesses they are less professional. In one way this may be true, with only a few businesses having a written strategic plan or formal planning process. This is only one higher level of professional behavior. Despite the lack of formal strategic planning, they use other types of planning tools. Buy-sell agreements, business valuations, boards of directors, formal recruiting, performance appraisals, and benefits administration indicate their professionalism.
6 | More unified family values - Family unity and cohesion are critical to family business success and an important goal. Family members that agree on values, attitudes, and beliefs exhibit that unity and cohesion. The practice of these values result in increased levels of employee loyalty, commitment, and organizational citizenship. Similarity of values between family members in business and their customers can also improve relationships and foster economic stability.
7 | Place their trust in family members as key advisors – Overwhelmingly the business owner’s spouse is seen as their most trusted advisor, followed by their accountant, a business peer, parent, lawyer, and financial advisor.

They just opened a business incubator in Rawlins and I’ve seen these around the state. What types of businesses use them?

First, there are different kinds of business incubators often suited to the industry you are in.  For example, some focus on food, technology, manufacturing or retail operations and have equipment and space suited to those needs while others offer office space and services more suited for professional service industry companies.  They often pool resources, such as administrative staff, utilities, and equipment common to the incubator clients providing better facilities for their needs and for lower cost than if they went elsewhere. 

Beyond the facilities, incubators more importantly offer assistance to help businesses.  Start-up and emerging businesses are usually the most vulnerable and most likely to benefit from support and guidance incubators provide.  Common benefits for incubator clients include:

• One-on-one advising/business counseling:  Having extra help to ensure that the fundamentals are in place for a business to be successful can help make sure a business will be viable and profitable.  These fundamentals include assistance with marketing, financial planning, operations.  With proper assistance, individual business’ weaknesses can be discovered and remedies can be applied so that they won’t prohibit a business from being successful.
• Being held accountable:  Small early stage businesses they are only held accountable by themselves whereas incubator clients are required to report regularly to an advisory board where goals, problems, and progress is shared with others who can then provide corrective/suggestive action.
• Business Community Resources: By working with the business incubator staff and alongside other incubator businesses a business is part of an important support business network in their community ranging from financial resources to developing their workforce or even successful advertising methods.

In Wyoming we have a number of business incubators and the best method to find out if there is one near you is to contact your local economic development office, your local chamber of commerce or of course, contact us at Wyoming Entrepreneur as Wyoming Entrepreneur is closely involved with incubators in several of Wyoming’s communities.  If you are starting a business or are a home-based business ready to take the next step and would like some help along the way, moving into a business incubator might be the right thing for your business’ success.

Jim Drever

Process mapping?

By Anya Petersen-Frey, Regional Director, MBA, PhD (abd), Certified Global Business Professional

What exactly is process mapping?    Bob,  Torrington

This is a great question, and timely, since I just finished a process mapping project with a local organization.  Here is a very brief overview.

Process mapping is usually considered a quality management tool with an overall goal of improving a process by looking for gaps in service, waste (time or product) or other issues. You may have heard terms such as "Six Sigma", "Lean Six Sigma"  or the Malcolm Baldrige National Quality Program all which provide tools geared toward maximizing efficiency while maintaining control over a process - be it manufacturing or service related.

Process mapping provides business leaders the opportunity to clarify how processes are actually being performed. It reveals problems such as bottlenecks or variations in how the process is carried out by different groups or individuals.  Put simply, process mapping strives to improve business performance by optimizing the efficiency of connecting activities in the creation of a product or service.

A process map is a tool - a means to an end, not an outcome in its own right.

The final output will, hopefully, be an  improvement in the way that the business process works.

 There are two main process models:

• The "current"  model which outlines the current process as it is performed now
• The "future" state model which defines the way the process will look when changes or modifications have been implemented - or the way it is desired to be.

The goals of completing this process are to create value for the customer and to reduce costs for the company

There are many ways to approach creating a process map.  Optimal is to have people at all levels of the organization involved, even in a very small firm. The starting point is to identify and map out a particular process for a "current" state.  If you don't know where the gaps or delays in a process are it can be difficult to identify and correct them. 

For example:  Imagine you own a carpet store that sells carpet as well as offers delivery and installation.  What is the process, from the customer perspective, of purchasing and having carpet installed?  The starting point might be "customer comes into store to look at carpet". Then what?  What questions are asked that direct the next step?  Walk the steps as though you are a customer including communication, time involved, etc. Note where delays occur, or where decisions have to be made.  This can be a messy process as different input creates a map with many divergent paths.  That is ok. 

This may be a simplified example but can give you a hint of how to take a step back and objectively view your business process.  It is important to understand what each person does - so ask them.  The map should have no personal names but rather only list the processes and the differences in how different people handle them.

There are many flow chart and process map examples on the Web as well as software to help you build your final map.  You will notice some standard symbols used to delineate "decisions", or "delays" - these can be helpful but the map can be created in a way that meets the needs of your organization.

It can help to have an objective facilitator guide the original data collection using input from various people in the particular process to get an accurate view of what is actually happening, but again, a business owner can begin the process on his own.

The key goal in using this type of tool is to maintain a competitive edge.  Don't become complacent and fall into the age-old "this is the way it has always been done" trap.  There are times when the an original method is still the best; but many times it is time to re-evaluate and institute more efficient processes.

Wyoming Cottage Business Food Law

The state of Wyoming now allows food products that are not potentially hazardous to be made in home kitchens. These food products can be prepared for sale or use only at farmers’ markets, roadside stands, private homes and at functions including, but not limited to those operated by not-for-profit charitable or religious organizations. It is recommended to contact the Wyoming Department of Agriculture or local health departments as to the foods that are allowed. View WY Cottage Food Business Requirements document.

Non-potentially hazardous foods means any food that does not require time or temperature control for safety to limit the pathogenic microorganism growth or toxin formation.  Some examples of non-potentially hazardous foods, but not limited to, would be baked breads, cookies, muffins, double crusted pies, dried cake and seasoning mixes, jams and jellies that are not low sugar or made with artificial sweeteners. The private home kitchen is exempt from licensing and inspection.

Food Safety training is recommended and good sanitation practices must be followed. Questions can be emailed Linda Stratton lstrat@state.wy.us or Dean Finkenbinder dfinke@state.wy.us.   

Some Good Economic News

A newly released study by INSEAD (a leading European business school) ranks 130 countries on innovation in their economies.  The US ranks as number one, followed by Germany, Sweden, the UK and Singapore.  The data used is based on performance in 2006 and 2007, so there is no telling what the economic downturn's impact might have been.  For a link to the study, go here:

http://www.insead.edu/facultyresearch/centres/elab/gii/GII%20Final%200809.pdf

What are your thoughts?  Do you see the US continuing as the leading innovative economy?

Wyoming Business Survival Day

In this tough economy, Wyoming businesses know they will have to run lean. Wyoming Entrepreneur.Biz can help. Call 1-800-348-5194 to schedule your free consultation with one of our business consultants. Our “Financial Health Check-up” is a good starting point to develop a new outlook for business success. Other Wyoming Enterpreneur.Biz expertise includes market and competitive research; business planning and valuations; internet marketing; HR consulting; management; international trade; accounting; marketing; legal audits; sustainability; government contracting; and more.

Wyoming Entrepreneur.Biz is a business consulting group, consisting of the Wyoming Small Business Development Center (WSBDC), GRO-Biz Procurement Technical Assistance Center, and the Wyoming Market Research Center. Our mission is to help Wyoming entrepreneurs succeed. Counseling and most market research services are free of charge to Wyoming residents.

Don't be a groundhog and keep your head in the burrow. Access the free services available to Wyoming businesses. For more information visit www.wyomingentrepreneur.biz.

Time To Be Cautious...

The January edition of the Wyoming Business Report carried an article by Russell Smith, the Region VIII Administrator of the SBA, titled "Time to be cautious when starting a small business".  He discusses the current economy and the Top 5 reasons that businesses fail.  Nothing real new.  But he also talks about 5 creative ways to get into business that are worth touching on.

1)  Buy an undervalued existing business.  It has a track record, established clients and assets in place.  Lenders are more likely to provide financing to an existing, established business, and trained employees are on staff.

2)  Exchange salary for an equity position.  Working your way in first as an employee will let you begin the ownership process and learn the business.

3)  Virtual office is the wave of the future.  Working from home can significantly reduce the cost of start-up if you don't require a store front location.

4)  Establish alternative and innovative means to obtain capital.  Actually he refers to older ways - saving money before starting, family or friends, starting small and building over time with cash flow generated by the business.  The less debt you incur, the better.

5)  Leverage outside counseling before starting your business.  There are lots of resources available to assist - SBA, Small Business Development Center, and the Wyoming Business Council to name a few.

Starting a small business can be very rewarding.  Being well prepared prior to jumping in can mean the difference between success and failure.  To read the entire article go to www.wyomingbusinessreport.com, and click on "Other articles from current edition".

What To Do In A Bad Economy

I recently received a newsletter from Curt Clinkinbeard, Author and Director of Training at the FAMEE Foundation with these suggetions for small business owners today.

1)  Get Back To Basics:  do what you know you have to do, and do it better.

2)  Take A Lesson From AA:  focus on the things you can control, not those you can't.

3)  Don't Listen To The Pessimists:  stay positive, and things will get better.

4)  Learn About Marketing:  now is not the time to be doing less, but rather to be more focused about getting the most impact for your money.

Pretty good advise I believe.  What do you think?