Building Resilience: How Family Businesses Can Thrive During Economic Downturns

Dear Friends and Family Business Leaders,

In recent months, headlines have been dominated by talk of inflation, rising interest rates, and the looming possibility of a recession. For many family-owned enterprises, this economic uncertainty triggers understandable anxiety—after all, protecting both the family's financial well-being and its legacy is no small task.

But here’s the good news: history shows that family businesses, when strategically prepared, can not only weather economic downturns but often emerge stronger, more focused, and better aligned for future growth.

In this month's edition, we’ll explore how resilience becomes a family business's greatest asset, and how principles from Family Fortune have helped families turn crises into catalysts for long-term success.

The Advantage of Family Enterprises in Tough Times

Unlike many publicly traded companies driven by quarterly results and shareholder demands, family businesses naturally take a long-term perspective. This generational mindset gives you a unique edge during periods of economic stress.

Here’s why:

• Patient Capital: Family owners often prioritize sustainability over short-term profits.

• Flexible Decision-Making: Family governance structures allow quicker, more agile responses.

• Deep Stakeholder Relationships: Decades-long partnerships with employees, suppliers, and customers foster loyalty and collaboration.

Case Study: The Bartoli Brothers* - Farming Through Recession

One of the standout examples from Family Fortune is the Bartoli family, fifth-generation California farmers. In the late 2000s recession, while many agricultural businesses slashed operations, the Bartoli's doubled down on innovation.

They analyzed their family’s core strengths—land stewardship, deep relationships with regional buyers, and operational efficiency—and made strategic shifts:

• Diversified crop production to include organic and value-added products

• Negotiated longer-term supply contracts with key customers

• Established transparent financial reporting within the family to keep all members aligned

By focusing on their unique value drivers and fostering clear family communication, they not only survived but increased market share post-recession.

*The Bartoli Brothers are a fictitious name for an actual Family Farming operation.

Key Strategies for Building Resilience

Based on lessons from families like the Bartoli's, here are four actionable steps you can take to prepare your family enterprise:

1. Conduct a Comprehensive Assessment

2. Prioritize Transparent Communication

3. Strengthen Relationships with Advisors

4. Define and Recommit to Your 'Why'

Final Thought: Opportunity in Adversity

In the words of Peter Drucker: “The greatest danger in times of turbulence is not the turbulence—it is to act with yesterday’s logic.”

Family enterprises that embrace adaptability, double down on their unique strengths, and foster clear communication often find that downturns, rather than derailment, become the proving ground for enduring success.

If your family is looking for guidance on navigating today’s uncertainties, I’d be honored to discuss how we can chart a steady course together.

If you would like to read our recent book “Family Fortune”, you can access it here: https://a.co/d/3ElVkOn

If you would like to have a conversation with Mike Schmitt, please feel free to schedule a meeting with him here: https://meetings.hubspot.com/mike2616

Warm regards,

Mike Schmitt Founder, The Rubra Group Author of Family Fortune