Family Businesses Thrive with Entrepreneurial Leaders

The mention of a “family-owned business” may conjure thoughts of a mom-and-pop deli on the corner. However, many of the 21^st century’s most illustrious and financially sound corporations were founded by family members - several with only two or three relatives.  

Koch Industries is ranked second in Forbes magazine’s list of America’s largest private companies, yet it began as a small firm in Wichita, Kansas in 1940. The oil, gas, and agriculture giant we know Koch to be today was founded by Fred Koch and sons, Charles and David Koch. This family business did not grow to  have $100 billion in revenue and 80,000 employees overnight. The Koch family possessed ambition, intelligence, motivation, and leadership skills – in other words, they were entrepreneurs.  

Many entrepreneurs have business knowledge and are driven, yet do not have the financial savvy necessary to build a corporation. Building a family-owned business, whether large or small, requires much more than a trust fund or an inherited company. For a business to really thrive, there are several necessary components. We think the following are a few of the most important:  

1.      Entrepreneurial Drive: Successful family businesses require driven individuals that exude an entrepreneurial instinct – an innate ability to  facilitate ideas and put them into action. Such individuals clear the path ahead for those who will run the business in years to come.

2.      Knowledge and ability to look beyond the family circle: According to Entrepreneur magazine, the definition of a family business is a “business actively owned and/or managed by more than one member of the same family.” Fogel Neale Partners is not your typical family business – while founding partners of the firm include Ralph Fogel and his nephew, Phil Fogel, the managing team consists of several unrelated partners, each with his or her own strengths and attributes. It is essential for business leaders to realize when it is necessary to supplement the existing team with professionals that possess the skills lacking in their current inner circle.

3.      Ability to plan for the future and adapt to changing times: Koch industries did not become the conglomerate it is today with static leadership. Evolution is key to a sustainable venture – a visionary entrepreneur looking to grow a family business must be able to shape the enterprise into a model that applies to today’s world. Technologies such as laptops, email, cell phones, online ordering, and web research are now essential business tools that were not available to entrepreneurs in the ‘60’s and ‘70’s. Running an efficient business in today’s world demands a tech-savvy person who can recognize the sentiment of the ever-changing market.

4.      Financial planning and wealth management: Financial planning and fiscal know-how are the building blocks of a successful enterprise. More often than not, the creative minds driving the business do not have the where-with-all to manage the company finances. Financial services firms can be relied upon to actively manage the revenues in order to acquire the capital necessary for future acquisitions and emergency situations.  

Any business possessing these characteristics will have a significant chance for success, but family-owned businesses like Fogel Neale possess built-in trust and respect – attributes that cannot be purchased or learned.