5 Tips on Having a Successful Family Business?

Family businesses make up for 80 percent of all business enterprises and create 60 percent of the country’s employment. This great contribution comes with a price and though it may seem easy, it’s certainly not.

Running a family business can either prove to be a blessing or a double-edged sword depending on how you manage it.

A successful family business can turn out to be a priceless opportunity to build something remarkable, passing down shared values to upcoming generations. But if not managed properly, it can become a source of family feuds, internal conflicts and wounded egos within a short period of time.

In today’s article, we look at a few tips to help you run a successful family business.

1. Communication is Key

Communication is essential for any relationship, whether it’s family or business. You might assume that your family members know you so well that you don’t need to discuss your expectations from them or make them understand the nature of a certain project. But if you want your business to work, it’s vital that you stop assuming anything and start communicating clearly and openly, just as you would with someone who is not family. If you don’t express whatever is bothering you, it will fester and ultimately come out in a destructive way.

Family businesses often fail just because of improper communication. Set up clear and official methods of communication. A difference of opinion can actually turn out be healthy. Make everyone clearly aware of what your expectations are from them and where they are lacking. Arrange meetings on a weekly basis to analyze progress, hear out any differences and resolve disputes.

2. Keep Everything Formal

Make sure every agreement or contract is formalized in a documented form. Disagreements are bound to happen in a business no matter how much you love each other.

Restrain from handshake agreements. Formalized contracts, share issuances, job descriptions and operating procedures are actually more critical in family businesses and relying only on voiced agreements opens doors for disasters and conflicts.

Entrepreneurs in a family business usually hesitate to take this step because it might appear as lack of trust. But a formalized documented agreement for a business partnership is simply good business that will protect all involved parties. To avoid any potential family conflicts, make sure that everything is in writing before you sign up for any project. These documents will navigate you through good and bad outcomes.

3. Decide Who Makes Decisions

Family members who have an ownership stake in the business, usually tend to rebuke employees who don’t review everything with them. This can lead to hard feelings by employees. Make it clear which big decisions can be made together because a debate over each little move will swamp the family business down to failure.

Develop a clear and fair decision-making process to avoid disputes and conflicts among family members. You can choose to make most decisions by consensus or votes and retain critical decisions to yourself as the owner, but be very clear about what types of decisions others can make, and then let them have it their way.

4. Broaden Perspectives

The decision-making process for a start-up family business can sometimes get too limited. Fresh, innovative ideas and creativity can sometimes get lost in a web of family relationships. Seeking advice from people beside family members will help you incorporate new ideas and can also be a good way to give your business a reality check.

Regardless of whether a worker is part of the family or not, developing close ties to the company and staff can help your business progress exceptionally. Make sure that other employees do not get drowned in the opinions of your family members, and always have a voice to provide feedback.

One way to ensure broadened perspectives, is to employ a diverse group of people representing different geographies, languages and cultures as they will offer contrasting opinions.

5. Keep Family Dynamics Outside

The most common hazard in a family business is emphasizing too much on “family” and not enough on “business.” Balancing between family dynamics and professional demands is perplexing.

Successfully separating personal and professional relations is one of the keys to a company’s success. Never let family disharmony tempt you into making unjust professional decisions.

If you’re a parent, listen to your kids ideas instead of using parental power. If you’re the kid, don’t perceive your parents ideas as old-fashioned. Don’t bring negative family issues into the workplace and be respectful of your coworkers.

You should also set a rule at family gatherings and holidays to not talk about work. If you can master this, your workplace and home will be happier places.

If you would like to know more about this, do join us in our next “The Working Family” event on 29 May. For more information, visit our event page @ https://herfamily.peatix.com/

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