Advantages of Family Businesses
The first advantage of a family business is commitment. When the needs of the family are at stake, then a family member is going to have a better sense of commitment to the business. This type of commitment is not possible in the businesses that are not run by families. The second advantage is flexibility. This means that family members are going to be more willing to do things that other people might not be so willing to do. Therefore, they are going to help the best way that they can to make the business successful. The third advantage is decreased costs. The business is not going to spend as much money on the business since most of the family will be working for the business for a pay cut. Most of the time, the family is going to make sacrifices financially for the success of the business.
Disadvantages of Family Businesses
The first disadvantage of a family business is conflicts within the family. It is important to make sure that there are no conflicts going on within the family when you try to run a business together. This is the best way to run a business into the ground when the family does not get along. The second disadvantage is unstructured governance. This is when the family members might have trouble following the directions of some of the other family members. Therefore, they are not going to take the instructions seriously, which can lead to the downfall of the business. The third disadvantage is nepotism. This happens when the family does not let people into the business because they are not family. But sometimes it is important to use an outsider if the family does not know how to do certain things within the business (Vintage, 2015).
Hiring a family member
If I owed a family business, I would be more than likely to hire my mother. I believe that my mother is going to work the hardest to make sure that my business is successful. The biggest advantage of hiring my mother is that she is a very hard worker. Of course, this makes for many other advantages since being a hard worker is going to add many aspects of the growth of the business. The main source of conflict is if my mother does not agree with something that I have did for the business. This could cause my mother to get mad at me and then if she is really unhappy, she might choose the leave the company. There are two main steps that I can do in order to avoid such conflict. The first step is to make sure that I respect my mother’s opinion and listen to the reason that she disagrees with me because she might have a good point. The second step is to make sure that I do not abuse the relationship with my mother just because she is trying to help me.
Key Elements of a Business Model
The first element of the business model is the value proposition. This is when as a business, I will figure out why the customer should buy products from me. Therefore, I will need to know if I am going to be able to provide services that maybe my competitors cannot. There are three main ways to make sure that the value proposition is successful. The first way is to customize my products to make them more personal to the customers. The second way is to reduce the amount of products that I sell. This is going to help lower the costs of production. The third way is managing each and every transaction that is made through the company (Tassabehji, 2003).
The second element of the business model is the revenue model. The revenue is how my company is going to make any money. Of course, selling our products is going to be the best way to make money. But the company can also make money through advertising. When the customers see how advertisements, then they are going to be more geared to buy our products (Tassabehji, 2003).
The third element of the business model is the market opportunity. This is where we decide the space and size of the market that we need. Even through there are many market segments, it is important that we are realistic so it is better to focus on just one market segment. This is going to be especially true because right now since we are a small business (Tassabehji, 2003).
The fourth element is the competitive environment. This is when the company will find out who else is in the space of our marketplace. There are companies that are going to be in the marketplace that will be selling similar products as our company. This could be direct or indirect competitors as long as the products are similar. Sometimes the competitors might be able to profit from this if they figure out how to sell their product more (Tassabehji, 2003).
The fifth element is the competitive advantage. There are certain advantages that my company might be able to bring to the market space. Most of the time, this is going to be in the firm of producing a product that is superior to the similar products. Another way to do this is through lowering the price of my products. If my price is lower than the competitors then customers might want to buy the products (Tassabehji, 2003).
The sixth element is the market strategy. I will need to come up with a plan on how to promote my products or services to attract my targeted audience. Some of the best market plans will fail if they are not marketed properly to the potential customers. This means that I will have to decide if E-Commerce is going to play a role in the business model. The best way to use E-Commerce is through a social network, where you can advertise to the customers for free (Tassabehji, 2003).
References
Vintage International, Inc. (2015). The Advantages and Disadvantages of a Family Business.
Retrieved on March 22, 2016, from http://blog.vistage.co.uk/advantages-disadvantages-of-a-family-business.
Tassabehji, Rana. (2003). Applying E-Commerce in Business. Sage Publishing: Thousand Oaks,
CA.
