Owning a family business can be a rewarding way to establish a legacy. It can also help provide for future generations. But the dynamics of a family-owned operation can prove challenging. It pays to have clear ground rules from the outset and then keep on top of them. This is the best way to maintain a successful family business – and we’re not just talking about financial success. 1. Define Values
You need to understand what your family values are. Then you can put appropriate structures in place with which to grow the business. So sit down with everyone involved in the early stages, and define the role of the family in the business.
Family values will be especially important as the younger generation come through. It enables them to understand why you’re here, how you got here, and where you want the business to move forward to. Well-defined values will also provide a stable foundation for the business.
2. Open and Honest Communication
Don’t let family matters get in the way of business. Schedule regular time to talk only about business. Don’t get side-tracked by personal family matters or petty disputes. Stay focused on discussions that are in-depth, strategic and business related.
3. Separate Home and Business
Keep business life and home life separate. This will help keep an unbiased view on the running of the business. It will also improve the business environment.
4. Get an Outside Point Of View
If the decision-making gets tricky, try an outside point of view. Help from a qualified outsider can be invaluable. This is particularly appropriate when thinking about growing the business. A qualified outsider can shine new light on the problems. They can also ensure new ideas aren’t lost in the tangle of family and relationships.
5. Family Strength
In the end the success of the family business comes down to the strength of the family unit. Many family businesses have failed in the past because the family has failed. So just as you’ve scheduled time for business discussions, schedule time to do the same with family. Organise a team-building event and remove yourself from the business environment. Focus on building relationships within the family.
6. Get It On Paper
It’s easy to overlook normal business practices in family businesses. Instead there are verbal agreements and assurances. This “trust me” kind of arrangement can be fatal. Document everything that’s agreed. Not doing so can be a big mistake. Get everything written down. Make sure the terms of the arrangement or agreement are well-defined. When family’s involved it’s more important than ever that the lines are clear. It will save you and your business time, money, angst, and even loss of family relationships.
7. Have A Succession Plan
A good business succession plan is key. This will ensure the business continues to thrive after you move on. Even if it’s early days, it’s important to have a plan for the future.