We recently had the pleasure of taking part in judging the Family Business United annual national awards, Hotel & Leisure category. The process got us thinking hard, just what is it that makes a family business so successful, and specifically how does this apply to a family run hotel business?
The key points that we identified were:
Clarity and Unity of vision
The clarity and unity of vision of the family members both running the hotel and providing investment behind the scenes. As well as ensuring good governance, this also means aligning and managing family involvement and interests beyond those directly involved in the business.
Focus on the essence of the business
The ability to focus on the essence of what attracts guests but ensuring that how that’s delivered evolves over time. Whatever it is that makes the hotel different, whether that’s about appealing to families, pampering adults or simply delivering a top quality service, needs to evolve to fit the current market expectations and adapt to new trends. Hotels have failed because they’ve stuck rigidly to how previous generations have operated in the belief this is what will work today. This encompasses understanding the current market and adapting to new trends. It also includes integrating and embracing the latest developments in technology, from EPOS to green recycling schemes.
Imparting the vision and values throughout the entire organisation
The success of the business will by necessity involve a strong management team. Part of their role is understanding and imparting the vision and values throughout the entire organisation. This should flow through into everything that the hotel does, from the initial guest welcome right through to the special touches at breakfast.
Having a clear, impartial view of the skills needed in the business
Given the 24hr nature of running a hotel, it is typical that some key roles within the business may not be performed by the family members themselves, and so motivating and listening to ideas from outside the family is also vital. The family must identify and develop talent within the staff team, which in turn will nurture and strengthen the internal culture of the business.
Engaging with the community the business is part of
To have the support of, and engagement with, the local community brings a two-way benefit to any local business. For a family there will be multiple connections with the local community and these often lead to differentiating the hotel from the competition. For example, the restoration of a historical building using local materials, right through to hosting the local school sports day.
Long term strategy and succession planning
Long-term strategy and succession planning. It’s never too early to start encouraging the younger generation to participate, whether through developing new business streams such as wedding planning and photography, or supply-chain integration to provide a farm-to-table experience.
Solid financial model
A strong financial model will provide a stable basis on which to grow the business. It should include a strong budgeting process. This will ensure they are able to make reliable cashflow projections and also scrutinise and understand the cost base to determine whether any cost savings can be made. A good model not only enables forward planning but will allow management to focus on the business operations rather than spending a lot of time on financial reporting.
What we loved most about being involved in the judging process was seeing the enthusiasm and passion that each of the family businesses had. Their core values really shone through, demonstrating that caring for the environment and their local community was equally as important as ensuring that staff were happy and that the business was growing profitably.
The winning combination? Clear vision and values, a united family and management team, and solid financials.