A new study of micro-businesses in Northern California found that family businesses are less likely to achieve their financial goals — and less likely to stay in business — because they are less likely to engage in strategic planning.
The study, by Dr. Dan Geller, found that only 10 percent of family-owned businesses have a strategic plan compared to a 53 percent incidence of strategic planning among non-family-owned businesses. The Geller study, which was conducted through TUI University (www.tuiu.edu), included 228 micro businesses with 25 employees or less. Of those, 164 were family-owned businesses, and 64 businesses were non-family-owned. Among the 164 family-owned businesses, only 16 (10 percent) reported having a strategic plan, whereas among the 64 non-family-owned businesses, 34 (53 percent) reported having a strategic plan.
Dr. Geller’s study found a correlation coefficient of 0.2523 and a high significance level with alpha < 0.01 between the type of business ownership and incidence of strategic planning. Adding this information to previous studies, which established significant correlation between the practice of strategic planning and business success, it is evident that family-owned businesses have a lesser probability of success than businesses with other forms of ownership.
One major reason owners of family business do not engage in strategic planning is a lack of time to devote to planning, especially since traditional strategic planning methodologies, which were designed for very large companies, are complex and time consuming. To help owners of family businesses practice strategic planning, even though they have very limited time and resources, Dr. Geller developed the Instant Strategist (www.instantstrategist.com) methodology, which allows one to develop a valid and practical strategic plan in less than eight hours. “Clearly,” says Dr. Geller, “even a busy family-business owner can afford that.”
Dr. Dan Geller is the president of Instant Strategist â, a strategy-research company established in 1998 in San Rafael, CA, to help micro businesses succeed through the practice of quick and easy strategic planning. The company offers a range of planning tools, including a book, software, audio and video CD’s, to help busy micro-business owners plan their way to success. For more information go to www.instantstrategist.com, e-mail info@instantstrategist.com
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