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Four Tips for Running a Family Business
JB Brown, president of Bremen Castings, attributes the family-run business’ success to their forward thinking business model, streamlined day-to-day operations, and above all, having each employee feel as though they are a member of the Bremen family.
Since its inception over 70 years ago, Bremen Castings has been a company at the forefront of the foundry industry having won numerous awards for its safety, technology and environment-friendly manufacturing.
“In an industry with strong traditional roots, it’s important to have your company stay on course and to keep up with the times,” says Brown. “To stay successful we need strong productivity. Positive productivity is based on the efficiency and effectiveness of your employees and business structure.”
Below are four of JB Brown’s tips for running a successful family business:
1. Honor Thy Father:
A large percentage of family-run businesses do not make it past two generations, so the key to longevity is ensuring the business is managed with effective leadership. When there is a strong management team, a solid business plan can be implemented which takes into account the highs, lows and future direction and goals of the company.
2. Cash is King:
Since family members are often the majority stock holders in a family business, strong cash flow is imperative to ensuring stocks (and voting power) stays within certain hands rather than being sold for a liquid dividend. “No company is going to survive very long without generating a positive cash flow,” says Brown. “We keep tight books and prepare for the hard times by getting ahead of the curve.”
3. Instill an Estate Plan:
Some owners of family businesses become so engrossed within their companies; they forget to look at the big picture and understand how various situations can affect both the business and the family’s assets. “A defined estate plan is essential for smooth functioning of both the family system and the business system,” adds Brown.
4. Enlist Outside Expertise:
Although the brunt of the business may belong to the family, it is important to enlist non-family members onto a board of directors to help with important decisions regarding the company’s future. An outside board can instill a sense of accountability and perspective on everything from conflict resolution to financial planning.
Bremen Castings Inc. is a family owned foundry and machine shop that was founded in 1939 in Bremen, Indiana. For more information about Bremen Castings Inc., visit www.bremencastings.com.