A family business is one of the most common pursuits that truly make many families prosper and be well-known. Observe big and popular companies nowadays; more often than not, they are established, owned and operated by a group of people coming from a single bloodline. A lot of small or start-up businesses today are also founded and managed by families because people are really seeing and looking forward to the fantastic benefits of owning a family business.
Indeed, the rewards are amazing for your family. You speak with each other more often and stay beside one another more frequently than you normally do. You can discuss things better and be more understanding of your family in and out of work. There are mutual goals that motivate you to help each other succeed because your family’s success is your success. Tougher coordination and stronger teamwork are its major fruits.
Amidst these amazing merits though, it can never be denied that there are some challenges that will test your family’s relationship once you start a family enterprise. Needless to say, it’s best if the results of the test are always in favour of your family, however, in many cases, they are the opposite.
Truth be told, having a family business is like a risk to your family’s bond. In many ways, it can cause blemishes and create chaos. It can stain and worst, wreck your home. Mainly, these are due to misunderstandings and disputes, relating to the business, that is left unattended.
If you want family biz, make sure you can handle it from beginning to end without ending it in a bad light. Find out what you must do! Here are 10 foolproof tips to run a family business without ruining your family.
1 – Set your family and business goals straight.
Before you think of activating a family business, ask yourself, “What are our goals?” The things you want to achieve — what are they? They should be crystal-clear to you. Rather than focusing only on your personal goals, ponder on your family goals because what you’re about to enter is a family business.
Set your family and business goals straight. Determine your targets as a loving family that dreams together. At the same time, on a different list, identify your objectives as entrepreneurs.
Doing this is important to make sure that you’re looking forward to reaching the same goals. You must be on the same page, so you can understand and support each other’s decisions and actions. This is for you to harmoniously do business as a family.
2 – Assign business heads with fairness and openness.
Heads or leaders are necessary for every company, big or small. These positions are needed, so everyone is sure who organizes, guides and makes final decisions. Automatically, founders are part of this board of executives.
When you yourself personally have to assign business heads, do it with fairness. Just because this cousin is closer to you than another cousin who obviously contributes more ideas does not mean you should choose the one closest to you. Do it with openness as well. Let everyone know the reasons why you’re appointing this family member to a certain high position in the family business.
On a different note, it would be best to have an election in the family, so that you will know who the majority wants to become their leaders. This is particularly helpful for big family enterprises, which may also involve non-family staff.
3 – Properly discuss financial contributions and profit distributions face to face.
Money is a weighty matter involved in a business, which makes it risky and challenging for family relationships. It’s a common root of grave quarrels and controversies within families.
To avoid experiencing unwanted issues in the family due to money, make sure to properly and comprehensively communicate about everyone’s contributions to and profits from the family biz.
Discuss about who will be part of the financers for the capital, funds, allowance and assistance. They have a tremendous responsibility, so their roles and the amount of contributions must be clear to all.
Talk about the profit distribution also, and ascertain that everyone is alright with your agreements. Do this to avoid lazy freeloaders from the family complaining about receiving wages that are less than other family members, who are apparently doing all the work. The bigger the labour and effort, of course, the bigger the fruits; the smaller the first, the smaller the latter.
4 – Let each family member know and have accountability in the business.
It’s a terrible headache when some family members take their business duties lightly. This causes delays, problems and poor quality in venture operations. What makes it worse is when you become the bad person to them every time you call them out for their irresponsibility.
Don’t wait for such troubles to happen. Before launching a family business, let each family member know and have accountability in it. If they want to be part of it, they should be ready to hustle, to lead and to follow. Make everyone aware of the consequences of failing or neglecting their obligations in the business.
5 – All agreements must be written and kept safe.
When you’re a family doing a business, there’s a tendency for you to rely on “This was what we agreed on,” and “I don’t remember you telling me that this is how it goes.” If you have substantial agreements and parameters regarding your business, they must be written and kept safe. With written, printed and signed documents, you will be sure of your contract. There’s no need to argue that this or that is what he said and that’s not how you understood it or whatnot. You can always have a file to look back to as evidence when the need arises.
6 – Practice transparency.
A family business isn’t a single person’s business. In everything — money, contracts, clients, concerns — practice transparency. Family members that are part of the business have the right to know everything about the business. Don’t keep secrets to yourself, especially if it’s out of greed or selfishness. If you’re transparent in your family business, your family will assume that you’re hiding something from them against their favour.
7 – You’re family at home, and co-workers at work.
For leaders in a family business, there’s always a dilemma when it comes to the manner of treating their family members at work. Some people are afraid that they will get hated by their family members if they act like they’re managing them or like they don’t know them. But what can you do if you’re a business owner? Of course, you have to work when it’s time to work.
Make the boundaries clear to the whole family. It’s quite challenging because of the roles, but keep in mind that you’re family at home, and co-workers at work. If your children are working in your family business as employees, then they must receive employee treatment. Don’t let overfamiliarity take place!
With such a mindset kept by the whole family, everyone will understand why managers have to be quite strict even though they’re siblings with the employees, and why employees have to be very obedient to the management even though they’re aunts or uncles of the managers.
8 – Leave family issues out of the workplace.
It’s unimaginably hard when you have a fight at home and have to work together in the office on the same day. It’s awkward or just impossible because of hard feelings.
Leave family issues out of the workplace. Leave them behind at home, then fix your conflicts when you get home too or after work hours. Don’t try to talk about them in the office because you don’t know what might happen. If things become worse instead of better, everyone, including non-family staff, will be shocked to see you making a fight scene that’s supposed to be private and family-exclusive only.
9 – Have reliable expert advisors that aren’t part of your family.
Family members can be biased most of the time when giving advice related to family and family business. Some can make you confident about the enterprise or overly confident, which doesn’t always help either. On the other hand, some can discourage and dishearten you about your business plans.
To get the best counsel and guidance, have reliable expert advisors that aren’t part of your family. They are important at the beginning, so you know the steps that will benefit your family and your family business. Have family lawyers that will clarify family business provisions as you start, continue, eventually pass on and end the business. In the face of family problems involved in the business, seek their professional help and assistance too.
10 – A clear succession plan should be made.
Since it’s a family business, you can’t set aside the topic of heirs. It becomes a huge issue when there are many potential successors who want to take the position of the former or current owner or head. You’ve seen these family disputes mostly in dramas, yet they exist in real life as well.
Problems concerning this are prevented when there’s a clear succession plan made by the founder or head of the family business. It makes the authority structure safe and secure. Again, this requires transparency and if possible, mutual agreement, so that in the future, no one will try to compete for power or inheritance.
Work with your family lawyers and financial planners for succession planning. You can’t do it yourself because this is a serious, legal family and business matter.
HAPPY FAMILY. HAPPY FAMILY BUSINESS.
Believe it or not, there are numerous reported and unreported accounts of families that have been destroyed, not by unwanted behaviours, huge differences or relationship affairs, but by their own family businesses. That’s because running a family business can be dangerous even in the most subtle ways. If you’re not wise and ready to combat the hurdles along its path, it can disfigure your family’s relationship even before you know it.
Clearly take note of the list above. These are trustworthy tips and reminders that will help you administer your family business without ruining your family. Always value the importance of a happy family, so you can enjoy a happy family business! Remember, you can replace your business but not your family.
ABOUT THE AUTHOR:
Nicole Ann Pore is a writer, an events host and a voice-over artist. She finds quality and well-researched writing as a worthwhile avenue to enlighten and delight others about things that matter. For her, it’s restoring and fulfilling to the heart and a great way to clear the mind while loading it up with fresh learning. Film critiquing and filmmaking are among her interests too. Giving all the glory to God, Nicole graduated Cum Laude from De La Salle University-Manila, the Philippines with a Bachelor’s Degree in Communication Arts.
Nicole Ann Pore is a writer, an events host and a voice-over artist. Quality and well-researched writing is her worthwhile avenue to enlighten and delight others about things that matter. She is a daytime writer for Adams Lawyers, a team of professionals that offer well-rounded services for all legal needs. Nicole graduated Cum Laude from De La Salle University-Manila, the Philippines with a Bachelor’s Degree in Communication Arts.