The advantages of private companies having a board are many. The business owners I meet who believe that only they know how to run their business are often the ones who end up being very lonely and eventually run their business into the ground.

No one has a mortgage on smart ideas and putting together and independent advisory board is a great sanity check for you in your business and certainly helps you make better decisions. Combined with this is the need to have an effective chair to run the meetings. Their role is to provide leadership in the way the board conducts its business.

If a formal board of directors is in the too hard basket then you should be looking at establishing an advisory board and it can be a great way to transition to a formal board in the future. I recommend you start with three others and yourself, do not have friends on the board, look to have a mix of industry experience, independence and someone not from your industry.
You must pay them for attending meetings and have a structure in place to run professional and effective meeting.

The objective is that the board adds value to the business.

Those I know who have an advisory or formal boards tell me how effective it is to raise to a higher level of performance.

Over the last seven days we have seen five retail groups forced into administration around Australia.

Colorado Group is the big one however there are some small groups such as Perfume Empire. So, what has happened ? The press is constantly forecasting even tougher time ahead and saying that consumers have stopped spending.

I have no sympathy for those who sold out to private equity companies. I believe the private equity is responsibly for stripping the guts out of operating costs to a point where customer service when out the window. They took the cash out immediately by selling off hard core assets and where hoping their forward projections were true and that they would sell out in the short term for big gains.

I do feel for the individuals such as employees, suppliers and contrcators who will lose not only their jobs but past amounts owning. In the meantime the most senior executives have taken their bonuses and the large pay packets.

Family owned companies are able to see their way through tough times as they do not forget the value of understanding the historical cycles that business always experiences. Just talk to successful founders of family retail companies and they will tell you that they understand that business is a roller coaster ride over many years. Its full of good and not so good times.

My prediction is that we have not seen the end of poor trading conditions and the next industry sector to feel the pinch will be the franchise industry. The issue here is that most, not all, franchisors will not reduce their franchise fees etc yet the franchisee is the one who feels the heat at the front line with so many fixed costs and declining sales. A single site franchisee in a declining retail market is most vulnerable.

For small retailers, it's time to really think how they can innovate, be different and communicate fiercely with their customers.

There is a post on a linkedin site that asked the question Do you think living by values and having integrity is a thing of the past ?

It has prompted a large number responses where many just assume that human nature is such that we should accept that it is a thing of the past. Naturally many also believe it is not a thing of the past

My personal response is to quote Stephen Covey's 7 habits of highly successful people and point to habit 4 Think Win Win.

Over the years I have worked in situations where senior executuives and some CEOs only think I win you lose. Being an accredited mediator, I have also never seen a successful mediation unless both side come away with a win.

There was an article in a business supplement this week end titled When your boss is a sociopath that talks about the damage done by corporate bullies and what we should do about it.

I could name a few CEO's who believe they must win at all costs. They are the ones who have no values or act without integrity in my mind. They are control freaks and unforunately exist in many businesses. Ego driven and think being tough is a badge of honour.

The best organisations are run by resonant leaders. I recommend you read Resonant Leadership written by Richard Boyatzis and Annie McKee from Harvard Business School

In my experience, families in business are often all about emotion.

It is nearly impossible to separate the emotional issues running in the background at family business board meeting. This is to be expected, and I believe it's too clinical to think you can do so.

This is especially true once you have inlcuded second and even third generation members into the leadership team. By now it's not just the founder and his or her spouse. It now embraces siblings, cousins, in-laws and aunts and uncles all of who are individuals who have a diverse range of opinions and behaviours.

Those who have managed this successfully are the family companies who have managed to install a Chairman who has the ability to take a position of commanding control, fairness and the ability to make the final decision when required no matter what some other believe. The business must come first and notice that I used the word command and not demand. A chair who is a token chair can also be a disaster.

Also, it is now well documented that having independant directors or chairman can add enourmous value to a family business. They are not influenced by family emotions and can be impartial when considering important business issues. They are there to bring their business experience and business acumen to the table and to ask questions that family members are not prepared to ask as they are not subject to any internal consequences or politics.

This quote is an endorsement for coaching or as I call it, individual continuous improvement.

"Everyone requires a coach. Every famous athlete, every famous performer has someone who is coach - someone who knows 'Is that that which you really mean?' and provide them perspective. The thing individuals are not necessarily proficient at is seeing themselves as others see them. a coach really helps.

Eric Schmidt, CEO Google.

Families in business are usually all about emotion.

There are many reasons conflict occurs in a family business and generally they revolve around ownership, employment of family members, playing favourites, influence by marital partners, inability to accept some family members are better suited to being the leader, family business is not separtated from business decisions, using business assets for personal use, unrealsitic wages verses normal staff wages, lack of defined written policies and procedures, the parents treating adult children as is they are still teenagers, family members assuming they have a right to help themselves as they please.

This is only a short list that highlights some of the issues I have come across when working with families in business and are documented by many who work in the same are as I do.

The overall key to getting it right with families working in business is to have formal management systems, structures, policies and procedures. You must conduct your business as if you were owned by external stakeholders and had to acoount for your actions and behaviours every month at a formal board meeting. It is not hard and you do not have to lose your core family values as a result.

I guarantee your business will be better off if you can do this. Believe me, I have been there myself.

With electricity prices predicted to rise by 64% over the next three years and gas prices by 18% you would have to think that SMEs need to take notice and have a green startegy.

Small Business Victoria tell me that when they are receiving a poor response to their seminars for SMEs on greening your business.

Maybe it's the title Green . There is so much press about climate change that private business owners have missed the fact that no matter whether its called climate change or something else, it's really about the future cost impost on business under the name of sustainability that will hurt.

You need to investgate the predicted cost rises to your business, keep yourself informed and start looking into ways to lessen those costs now.

Last week I gained a clear understanding of the Victorian Office of Small Business Commissioner. I knew it existed but had little real understanding of how they operate or what they involved themselves in.

As their literature states A vital role of the VSBC is to investigate complaints by small business regarding unfair market practices and mediate disputes between parties.

The VSBC aims to create a level playing field. And their case studies to date show that that they have been very successful in achieving their aim. The success rate is in the high 90's.

One area that could be of interest to small business is the VSBC has a brief to ensure that Government departments and agencies improve the business environment in which they operate and are conscious of the needs of small business. If you have deals with Government at any level and are in dispute, make a call the VSBC office on 13 22 15 as see if they can help in the first instant.

The Act of Parliament that set up the the VSBC states  that they are to be dedicated to promoting a competitive and fair operating environment for small business.

In recent times I have come across some private companiess who have been tying to implement a lean program into their business. Not one of them have done so successfully.

My experience convinces me that Lean is being oversold as a tool to solve many problems and to save thousands of dollars. The overall Toyota developed concept of Lean has many advantages, if you are a large organisation, and can devote the  amount of resources required to make it happen.

Too many underestimate the resources required and that nothing will happen if you do not address the people issues first. Focus on your people and create an environment that will embrace some the Lean principles. If you are a smaller organisation, start with 5s first and then slowly introduce other concepts such as seven wastes.

Finally lean is for the long term and is about changing people behaviour. This is the hard part and must be driven from the leadership and become pervasive through all the organisation.

As we read about and see the destruction caused to homes in the floods in Qld and Victoria its time for all business owners to stop and think about a plan if something like this hit your business.

All large companies I have been involved with have such a plan ( known as a BCP, Business Continuity Plan ) yet I cannot name one family or privately owned who has such a plan.

In fact where I have recommended such a plan, the repsonse is Why do we need this? or  We have plans thinking that its all about having back up for the IT system.

I have a good friend in Ipswich who just lost his whole business to the rising water and now he has to rebuild and start again. He is more fortunate than others in that he can afford to do this. However it's the mental emotional aspects that will effect him the most.

If you have clients and cutomers who have a need to fill their own orders, they will go your oposition to meet their demand.

It's a difficult situation and one that all business owners should role play for future reference just in case. This should be followed up with written plans and regular simulations.