Building a family-owned business can get complicated. You will have to face the same challenges that every company does. However, you must also navigate other tricky issues like personal relationships, work-life balance, and succession planning. The good news is that there are helpful strategies for managing these conflicts and ensuring your family business continues to prosper for generations to come.
Here are six tips for running a successful family business.
“Families have their own way of communicating, and, as many family therapists will tell you, it is not always the best way. Defy convention and make open, regular communication an essential part of your family business. When you sense communication problems, confront them immediately. Larger issues at play? Bring in an outside consultant.”
Source: Walden University
2. Set clear boundaries
“Setting clear boundaries is so important—especially if you want to run a successful business and still have a family to come home to. Keep your family life and work life in check by setting strong boundaries. If you’re at work, keep your emotional issues at bay. And if you’re at home, don’t talk about work. After the lights go out, take off your boss or employee hat and just be family.
Pro tip: Be proactive about learning the boundaries of those around you too. Learning this will help you and your family work well together—for the long haul.”
Source: Ramsey Solutions
3. Maintain everything formal
“The next tip for maintaining a family business successfully is making sure that each and every contract or agreement is formalized in a documented form. No matter how much you love your family members, disagreements are bound to happen in the company.
Relying everything on verbal agreements such as job descriptions, formalized contracts, operating procedures, and share issuances, are more critical in family businesses. Relying only on verbal agreements opens doors for conflicts and disasters.
So, if you want to reduce any potential family conflicts, then it is always advisable to have everything in writing before you sign up for any project. These documents will navigate you through good and bad outcomes.”
4. Don’t play favorites
“One of the difficulties of going into business with family members is the temptation to play favorites. Employees who are also family members shouldn’t be given special treatment in pay, scheduling, feedback, or promotions. A smart way to avoid an issue with favoritism is to not hire family members who are seeking employment from you as a last resort. Hire family members who are interested in the business and want to work there.”
5. Hire for the position – not the person
“A big mistake many family-operated businesses make is forcing a family member into a role that they don’t have the desire, qualifications, or interest in performing. This model typically doesn’t work. Job openings should be filled with people who have the credentials, skillset, and demonstrated performance to do the job.
Tip: If you have a family member who is interested in the family business, bring them into an entry-level position and have them work their way up the ladder by demonstrating their eagerness to learn and value to the organization.”
Source: The Thriving Small Business
6. Develop a succession plan
“A family business without a formal succession plan is asking for trouble. The plan should spell out the details of how and when the torch will be passed to a younger generation. It needs to be a financially sound plan for the business, as well as retiring family members. Outside professional advice to draw up a plan is essential.”
Need Funding for Your Family Business?
If your family business needs financial help to weather a slower sales period or if you want funds for a major project, First Union Lending can certainly help. Our business loan programs are fast and flexible. Call 863-825-5626 today!