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It is a weird topic to write about, but I did some research so... Anyways, we are here to broaden our vision! I am not limited to boring textbook info and can explain other things in a fun way if you want... I HIGHLY RECOMMEND YOU TO READ EARLY EPISODES!

Start-up Period of Small Size Businesses

An idea is the spark of any company. The limitless possibilities are like dreams in the early stage of the family business and founders tends to test every possible project. But it is certain that there are two characteristics of starts-up regardless of the industry. First, the founders invest all of their time, energy, and money as well as they are at the center of everything in the company (Gersick et al. 1997). The informal organizational structure creates freedom and makes it is easy to communicate (Gersick et al. 1997). Based on the minimal structure of company and enthusiasm of founders, all decisions are made or reviewed by owner (Gersick et al. 1997). Second, the start-up mainly focusses on a single product or service and searches for a niche to root (Gersick et al. 1997). Let us consider a family startup with a great idea on their head. The major problems that the family startup will face are creating a product, entering to the market, making business plan, and financing the company (Gersick et al. 1997). The idea is the core of the business which brings all of the dynamism. The existence of possible markets for the product and availability of the market to newcomers are problems that are integrated to the idea. A business plan converts the dream to a grounded business, while it requires a basic level of knowledge to the concepts of the economy. Financing the company is usually the major problem for most startups and they continue with a minimal budget until a remarkable market share is achieved.

During development of the first product/service and after start-up turned into a small company, the needs of the family business are high level of labor, a fast-processing system with minimum procedure, strong communication, harmony, and commitment to the business. Things they lack are industrial knowledge, experience, expertise, and money. So, what a family CEO and a non-family CEO can offer to the family business can be compared based on what the business needs and what it lacks. A family CEO has detailed knowledge of the family and the business as well as it has strong commitment to family business’s long-term success (Sciascia and Mazzola 2008). Because of the strong family relationships, communication channels are always open, and it is easy to decrease the tension during an argument. A family CEO is financially bound to the success of the company; therefore, it tends to be hardworking and to spend extra hours for the business. Most importantly, a family CEO is the cheaper option in the financial burden of the family company. However, a family CEO of a family startup probably lacks experience and expertise which a non-family CEO can bring to the business. With its expertise, the professional CEO could determine the inefficient mechanisms in the company and with its industrial knowledge, it can support the product/service development processes which increase the speed of the operations. The professional CEO could prevent an unexpected failure of company with the advantage of its experience. Furthermore, having a professional in the team will be an advantage for the family company when they search for capital. The business background of the professional CEO will be a guarantee for the success of the family business on the eyes of the financial authorities. Although a non-family CEO has a great potential for the family business, it is an expensive option and its commitment to the business cannot be guaranteed which may be a deadly mistake at the early life of the family company. The success of a family business always starts with strong family values and commitment; thus, a family CEO is the key to the success during establishment.

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