More and more millennials are choosing to pursue their family business, wherein they will be able to strengthen their personal inter-family finances and also be their own boss. But besides personal, sentimental reasons there is a very sound logic as to why so many youngsters are using their business degrees to bolster their inherited trade and company.
According to a recent survey, family-controlled enterprises make up for around 20% of all the companies in the Fortune Global 500 list, which is a clear indicator that in the coming years, with the boom in digital monetization, even more, MBA graduates will opt to put their merits into their family firms.
It has also been pointed out by several trade analysts that millennial professionals are essentially go-getters and are not as keen about traditional forms of service and would rather be a part of something they can control and take forward. Another predictive survey statistically proves that by 2025 there will be more than 15,000 enterprises worldwide earning a revenue of more than $1 billion and at least 35% of them will be family-run businesses.
Though this is a great time for MBA-holders to invest their merit and acumen into their family businesses, it’s not all cakewalk. Research has shown that many family-driven ventures find it difficult to move towards a globalised working approach which is crucial in today’s cutthroat economy.
A business degree holder will obviously make some major cutbacks and changes when they take up the mantle of their company and many times, companies with centralized operations find it tremendously challenging. This is exactly where a business degree comes in handy – to usher a business into the new era.
Reasons To Use MBA To Nurture Family Business
Let’s look at how exactly an MBA can help you nurture your family business:
1. You will have access to sound human capital
When it comes to family-run businesses, no matter how big or small, the personal connection makes a whole lot of difference in the brand’s image. Even in the digital age, it’s substantially easier for an enterprise to legitimise itself if several generations have already invested their labour and money into a single venture.
This proves that not only is the family self-assured about their operations but it is also an indicator of a selective cache of expertise which is usually only shared among the core members of the family, and of course the collective generational wisdom.
An MBA holder can obviously make use of their delegation skills to fathom which area needs whose expertise and accordingly switch up the operations after an in-depth analytical brainstorming keeping the company’s finances in mind. Learn more about how MBA helps entrepreneurs.
2. Steady financial growth
Debt financing is obviously easier for family-run businesses, and you also get to share the cost with other members. The reason why business families have a larger scope to benefit is that usually their investments are collective and the burden isn’t just on one individual. Moreover, in the case of family-focused ventures, there are bigger opportunities for cost-cutting in production, marketing, and asset development activities.
And when a business major takes the helm of the operations, it obviously acts as a morale booster for investors; this means the company is making way for the newer generation, who are in turn fully prepped.
Also Read: Career options after MBA
There’s also a serious financial back-up readily available, especially with businesses that are older; this acts as a safe capital especially during the recession. They often save family-run businesses from liquidation when things are bad. This is something emerging entrepreneurs do not enjoy, irrespective of the capital involved.
3. The trust of investors
For up and coming firms winning the trust of stockholders and financiers is one of the biggest ordeals, especially considering the competition. So, if you are determined to be your own boss, it’s always wiser to pursue your family’s business if you have the option.
Family-run ventures usually have a bankable pool of investors with whom they enjoy a steady relationship; sure you can use your business degree to ramp up the financier’s list and include global stakeholders, but you will always have access to a steady stream of investment, courtesy the relationships which have been sustained over the years by your predecessors.
Since acquiring a loyal base of investors is the biggest hurdle for any new entrepreneur, this is a huge financial relief if you decide to join your family’s enterprise.
4. Minimal governance costs
There are several kinds of supervision costs involved when you’re starting a new business; you can’t micromanage and neither can you afford to always keep tabs on your employers. Most newly emerging business owners agree that they find it increasingly hard to find workers they can bank upon.
But when you have members of your own family involved in the same venture as you, the cost of monitoring goes down; not only do you need lesser outsourcing of labour but you can easily trust those who are already in your employ. And of course, you also inherit a steady cluster of labourers and employees who already have experience working for the company.
This also means you can put your delegation skills to work, assign newer and more relevant talents, seek some new-age consultancy. When you’re not constantly worrying about getting work done, it frees up a whole lot of time, which you can actually use to ideate, to learn the ropes better, to brainstorm strategies.
5. Nepotism helps
When it comes to business, generational know-how is something that is easily shared. For instance, if your family works in steel, chances are you will know quite a bit about the industry already; add a business degree in the mix and you have the best of both worlds and you can actually take your company to new heights.
This is something that’s key when it comes to acquiring investors; it has been proven that financiers usually bank upon family-run companies and are more easily convinced about their prowess, because it is largely assumed that the newer generation has inherited the expertise and proficiency, considering the genetic component.
6. You can make the best use of your entrepreneur hood
Most business graduates end up in high-paying but service-centric jobs their whole life, in spite of having a dream of owning their own start-up or business venture. If your family already has a full-fledged company that’s functional, you’d never need to work under anyone else. That is, of course, if you want to be in the same industry.
But it is evident that with an MBA you can shape the company any way you want it to, and take it to new heights. With your management, communication and delegation skills, you can give your family’s business a total facelift. You have the know-how to take it global, to outsource labour, to build a community of employees across the globe, to find new shareholders.
What you essentially get is a readymade business infrastructure that’s already up and running. Needless to say, if the said family business is a thriving venture your job turns considerably easier. Apart from these reasons, taking up MBA has multiple benefits and advantages.
If you are keen on upgrading your career with an Executive MBA course, upGrad is offering MBA from Liverpool Business School. The program has been designed to stand at par with the best on-campus Executive MBA programs across the globe.
And the cherry on top – upGrad’s excellent flexible and interactive learning and evaluation systems allows you to balance your personal and professional life in a hassle-free manner. Check out for more information & let our student counsellor help you with your questions.
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How can an MBA add value to my family business?
An MBA program gives you the right tools to solve problems, make decisions, think strategically, and much more. An MBA will expand students' knowledge towards the fundamental elements of business and its management. An MBA will make you work on genuine company case studies. You will be driven to think in a certain direction. Whether one should expand into a new product area or market? How should one understand competitors' strategies? Why is product quality or timeliness of deliveries not up to the mark? MBA will add value by transforming you into a self managed learner, better equipped to face the real world of business.
What are the main reasons I should join my family business?
Family businesses can offer myriads of benefits. Most of the time you will notice steady financial growth, evergreen trust of investors, minimal governance costs, etc. With an MBA program, you can make the best use of your entrepreneur hood. An MBA degree will give you a golden chance to understand how to successfully manage, organise, and adapt to your family business. MBA will provide you with skills that would help you nurture and grow your business. An MBA course will translate your raw potential into great developing opportunities that will benefit your family business.
Which are the main MBA skills I can use in my family business?
An MBA program would train you to introduce modern techniques that can lead to maximum profitability and minimise capital. MBA would also teach you communication skills that can be used in marketing powerfully especially when you put forward the business plan in front of your investors. Learning finance strategy and marketing will be the foundation of your learning that you will be able to adapt to your business. MBA will teach you innovative technology that the previous generations in your family business could not avail.