Family Business Advice
Looking for good advice for family businesses? Working with family members in a family-owned business is full of challenges, so we've assembled a list of excellent family business tips for you.
It's hard enough to deal with family. It's even harder to deal with family in the context of a family business.
Family businesses face all the same challenges that other businesses face, but they also face issues that are unique to family businesses. Which family member has the most power? Which family member makes the most money? Do family members get more perks than non-family members? Who will get the business when it's time to pass it on to the next generation?
Given all these issues, it's no wonder that running a family business is a challenge. Here are some great tips for avoiding conflict in a family business and keeping things on the right track.
Communicate Early and Often
The best tool for keeping a family business focused on business is good communication.
Good communication avoids unpleasant surprises and can minimize the damage on potential family business crises by addressing problems sooner rather than later.
Take the time to ensure that good communication channels between family members are in place. It's a smart idea to conduct family-only business meetings at least twice a month. A family business meeting allows family members get together to discuss how the business is doing. Each family member can discuss their areas of responsibility.
Don't Make Working at the Family Business Mandatory
It's wise not to force a family member to join the family business. Let them know that it's an option but encourage them to consider other options.
If a family member gets experience somewhere else and then joins the family business later, that's a good thing. They will bring new ideas and fresh thinking - avoiding the insular thinking that often plagues family businesses and ultimately leads to their downfall.
Nip Family Business Problems In the Bud
When issues arise between family members, address them quickly.
If a dispute is not resolve early, it can turn into a much bigger problem. Be on the lookout for hostility or jealousy between family members, and deal with such issues directly as they arise.
Don't Take Your Work Home and Visa Versa
It's smart to distinguish between family discussions and business discussions and keep those conversations separate.
Don't have business meetings at the house, and don't have family meetings at the business.
Mixing the two together all the time is a recipe for disaster. The business, the family or both may fail as a result.
Hold Family Members Accountable for Results
In a family, the standard is often to forgive a family member when they make a mistake. In contrast, mistakes in business are not easily forgiven.
Accordingly, a family business must lay down clear guidelines: in the business, we are going to hold you accountable for your actions, just as we hold all of our employees accountable for their actions.
Every family member should have a detailed job description that outlines what they are expected to contribute to the business. Measure performance against pre-defined metrics so there is no ambiguity on whether desired results were achieved.
Treat Family Members and Non-Family Members Equally
If family members get preferential treatment, non-family members will lose their motivation to help grow the business.
Smart family businesses don't flaunt their ownership by giving family members perks that others don't get.
Do whatever it takes to make non-family members feel that they have the same opportunities as family members. Otherwise, expect your family-owned business to deliver mediocre results and lose market share to competitors.
If you can't treat non-family members equally in some area - for example, maybe they can't have stock ownership like family members do - make up for it in some other way.
Ask A Family Business Expert for Help
When in doubt, ask for help.
Family business consultants are well trained in dealing with issues that are unique to family businesses. They will provide you with advice on dealing with complex family business challenges. To find family business counselors in your area, your best bet is to search in your favorite search engine with phrases like "family business advisors" or "family business counselors." You should also ask other family business owners for referrals - they may have already addressed many of the challenges you are currently facing.
Share this article
Additional Resources for Entrepreneurs