“Competitive Strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.”

Michael Porter

WHEN a trade official was asked what makes a family business last from generation to generation, she said that there was so much information available about how to start a business but she wasn’t sure what makes a family business last and what will not make it last.

Perhaps instead of asking what, the entrepreneur should find out how to make his or her business last from generation to generation.
The term “family business” is slowly making it to mainstream business literature. However, there is no accurate image of family business except the “ala-Chinese style,” thanks to business tycoons like Henry Sy, Gokongwei, etc.

The Filipinos may have graduated from the “sari-sari” store to small and medium business enterprises. But for one thing – there is less hype on how to make a business last from generation to generation. So it is no wonder that the idea of how to make a family business last from generation to generation contributes to the confusion.

So how do we separate the startup stuff from the legacy thing?

The family business or any business to have a long-lasting impact has to intertwine itself with business marketing steps. A business could not last without a common terminology often referred to as the target market.

Family businesses are those that have been passed down, either intact or in fragmentary form through generations. Some of these family businesses claim to have roots that reach back to their great patriarch.

A family business is “owned” by its members. It is part of them. A family business is a marketing experiential business. What this means is that the personal life of each family member is heavily influenced by his or her marketing experiences.

Marketing refers to the commercial processes involved in promoting and selling and distributing a product or services. It refers to the commercial functions involved in transferring goods from producer to consumer (www.thefreedictionary.com/marketing).

Since the months of September to November are usually devoted to session planning months, here are twelve strategic steps to make a family business last from generation to generation:

1. Learn good cash management. Family business owners or members should see to it that there is an available cash flow on a monthly basis. In addition, experts advise a once-a-week disbursement for easier monitoring of cash inflow and outflow. Setting up some internal controls can help ensure that cash is available whenever there is a need for it.

2. Establish and maintain committed relationships with clients. This refers to the ability to identify the needs, preferences, and buying habits of regular customers. Generally, family business owners must commit to the specification/s of their loyal customers in producing goods and rendering services that measure up to quality standards.

3. Control Inventory. The basic question is “just how much is enough stock?” There is a constant need to know when to order and how much to order. The key is to distinguish between basic stock goods and seasonal goods since each kind is controlled in a different way.

4. Maintain continuous supply of raw materials. Family business owners must guard against running out of stock when he or she needs them.

5. Be cost-efficient. Costs refer to “All the money a business spends in making and selling its products or services” such as raw materials, salaries and wages, electricity, interest on business loans, etc. Consequently, the following are ways to reduce costs: subleasing, renting instead of buying, asking children’s help, recycling etc.

6. Maintain the quality, features and design of the product.

7. Involve or immerse all the members of the family. This leads to mentoring the successors of the business on critical business issues. Mentoring can either be direct or indirect. Direct mentoring spells out the do’s and don’ts of the family business to the younger family members.

8. Improve or modify the product using the 4 Ps of the marketing mix. Is the product or service still relevant? Is the price still right? Are advertising and marketing strategies still right? Are the products still distributed or the services rendered in the most convenient place for customers?

9. Conduct continuing research on why a customer would prefer your family business over other companies.


11. Make sure that the brand name of your product or service has name recall from one generation to the next generation.

12. Enhance the uniqueness of your family business. What makes your family business different from the rest?

Follow all the recommended steps to ensure a family business legacy. A legacy is a legacy!

(Professor Soriano is an Asean Family Business Advisor and Chair of the Marketing Cluster of the Ateneo Graduate School of Business. He will be facilitating one of his best selling 1 day workshop on September 19, 2014 Friday, entitled The Challenges of Managing a Family Business at the Crowne Plaza, Ortigas Center. For further inquiries please visit wongadvisory.com or contact Allen at 09228603186 for details.)

Published in the Sun.Star Cebu newspaper on August 12, 2014.

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