Mixing business with family can end up catastrophically without a plan, some compromises here and there, and maturity. However, when it succeeds, it might last through generations. If you are a part of a family business or planning to start one and you need some help, we asked a professional business broker, Cress V. Diglio to share with us some tips you should follow to establish and run a successful family business.
Photo via: pexelsPut everything in writing
Although handshake agreements show trust and respect, they are not the smartest move in the long run. Make sure to put every agreement, contract, payout and share in writing. Document everything to avoid any future misunderstandings and conflicts. It will also ensure that everyone will share the good prosperous times and be responsible through the bad ones.
Establish rules and responsibilities
Set rules from the beginning and watch your work go smoothly. In a family business, boundaries can cross easily when it comes to responsibilities, duties, tasks, and dynamics between members. Therefore, be smart from the start and divide them fairly. Use available management tools to help you. You should also elect a leader or a decision-making committee to avoid conflicts or yelling matches when the time comes to make big choices.
Hire non-family employees
Do not be afraid of “outsiders” as they will bring with them fresh ideas, objectivity, and diversity. Families, in general, share similar beliefs, values, and views, which might hinder their business and make it too closed off due to the lack of different points of view. So hire non-related members in your business to keep it centered and give it the much-needed reality check every now and then. You should also get an outside advisor who is not affiliated with any family members to guide you through conflict times.
Communicate
The key to a successful family business is communication and more precisely productive communication. Differences in opinions and the problems they might generate are inevitable but they might cause the business to fail if not communicated properly. Set regular weekly meetings to discuss matters, problems, progress, and decisions. Go through disputes then, air them out, resolve misunderstandings and your business will stay on the right track.
Focus on the business as well as the family
A family business has two aspects: the family and the business. Focus on them equally and do not compromise one for the other. Just as we advised you to set regular business meetings, you should set family ones. Leave business in its place and enjoy your family gatherings without its stress. Have fun together because it will make you appreciate one another more, which will make the work run smoother and with fewer conflicts.
Always be fair and objective
Favoritism and nepotism will be the demise of your business if you are not careful. Hire family members because they are qualified for the job and they deserve it and not out of familial obligations or sympathy. Also, always be fair when it comes to promotions, salaries, criticism, praise, and schedules between family and non-family employees.
