Tips for Running Your Family-Owned Business
By Minerva Manzano-Kraushar, CMO, Preuss Kraushar Financial
When starting a business, sometimes the most obvious business partners are in your family. No matter the family ties, family run businesses often present a unique set of challenges. While running a business is a large undertaking all on its own, having family in the mix can add another layer of complexity.
In the early days of launching a business, the risk may be especially high. The thought of a new business venture shared with family may be exciting, but not having a defined business plan or vested commitment, can leave your enterprise at risk. A family business can be a great opportunity, but if expectations are mismanaged, it can become a source of stress and conflict.
To successfully grow your family run business, consider the tips below:
Tips for Running Your Family-Owned Business
1. Keep family dynamics out
Sometimes it is hard to forget last night’s spat when pulling into the office. To give your business the best shot, never let a temporary disagreement affect how you communicate, behave and perform at work. Other employees may be forced to choose sides or can be negatively affected by the tension. This could mean a hard ego-check that will ultimately result in better communication and a more streamlined business process.
2. Maintain boundaries
Getting carried away with shoptalk outside of work is easy. Be wary of mixing business with your personal life. This may also be a slippery slope into gossip too. By limiting business discussions with family employees outside of the office, you give everyone the opportunity to disconnect from work.
3. Communication is key
With every relationship, clear communication is important. Just because you are family, does not mean you are always on the same page. Before moving forward with a business decision, ensure that you have properly discussed and considered all of the possible outcomes. Sometimes this means learning to voice your opinion or simply letting others have a turn to talk. Consider implementing weekly meetings to check on progress. But do not micromanage.
4. Define roles and responsibilities
Remember that each family member is essential and valuable. The more detail you include in role descriptions, the less room there is for conflict. When in the planning stages, make sure that you consider each member’s skills, interests and passions. By clearly setting expectations, you maintain professionalism and avoid stepping on each other’s toes.
5. Act professionally
Always have proper measures in place to document all decisions agreed upon. This mitigates miscommunications, misunderstandings and potential for heated arguments. Documentation also gives everyone a way to navigate performance. By not relying on verbal agreements, you are reducing the risk of conflict.
6. Treat family fairly
Some experts have warned against working with family all together. It might be easy to hold higher expectations for your family than you would with any other business partners. The opposite might be true as well. Lower expectations may be given to fill in for weaknesses. Set the same standards for all workers. With this, do not be expected to provide jobs out of sympathy. Remember, you have a business to run, not to sink. Saying “No” can be necessary and is part of business, so get comfortable with it. Some managers may unintentionally create a toxic culture of nepotism. Don’t be that person.
7. Create a succession plan
Founders are not obligated to pass their company on to their family, but should put serious thought into an exit strategy. Whether at retirement or in the event of death, unexpected events can and do occur. By creating a clear succession plan, you take out the guesswork when it comes to who will inherit the company. Without a clear plan, feuding may take place among assuming individuals. A skilled financial advisor can help you navigate a succession plan.
8. Consider Outsider Perspective
Beyond a succession plan, a financial advisor can assist your growing family enterprise, also. The right advisor can offer outside opinions, creative solutions, and point out blind spots. And, there are many opportunities for tax strategies with family-owned businesses. Your financial advisor will be able to prepare a solid financial plan that will help you track your financial progress.
In the end, there are many advantages of family-run businesses. The pressure to launch a company is heavy, but by working side by side with family, it eliminates the need to choose between who you will allocate time to. By incorporating these ideas, you will set your family enterprise up for great success.
About the Author
Min Kraushar has taken leadership positions in the genesis of four Alberta owned companies and enjoys working with others to create a solid financial plan. She is also mom to 3 boys and has been happily married to her best friend for 11 years. Follow Preuss Kraushar Financial on Instagram @financialplanningnow.
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