7 Tips for Running a Family-Owned Business

Family Business

Running a family business with your loved ones might sound like a dream, but there are unique challenges as well.

Nothing feels better than building a successful business with your family. At the same time, nothing can be more difficult and frustrating on a day-to-day basis. From family business succession to hiring non-family staff to fill the gaps, there’s always a lot to think about.

It’s rarely easy to work so closely with people you love, but facing these challenges head-on can build strength and help the long-term prospects of your business.

In this post, we’re going to give you 6 helpful tips for running a family-owned business. Learning how to work together may not be as seamless as you may have thought, but read on and you’ll get your company on the path to success.

1. Communication Is Key

Often, family members have a very specific way of communicating. This isn’t always the most effective or professional way of communicating and it can lead to murky waters. The worst thing you can do is keep important information from one another regarding your business.

Try to communicate more as colleagues do than family members do. You should always know where each family member stands on every family business issue. One way to accomplish this is by having regular meetings to check in with one another.

If you’re finding it difficult to talk to your business partner-family members, then it might be helpful to bring in outside help. Family business consulting can help you work through business communication issues so that your company doesn’t experience any major setbacks.

2. Setting Boundaries

One of the big problems that family businesses run into is the blurring of boundary lines between work life and family life. Things can get messy if you don’t know when to quiet down the business talk at family gatherings or start to bring family issues into the workplace.

If you want to set yourself up for success, you’ll tackle this by setting up boundaries in the early days of the business. Not only will it benefit your personal and working relationships within the family, but it’ll also benefit the non-family members of the business. After all, you shouldn’t be discussing important issues without all of the executives present.

3. Carving Out Roles

If you fail to define professional roles for each family member, you may have a business identity crisis on your hands. Different family members may have differing ideas on how to run the company. It’s important to sit down and figure out what each person is going to do in the early stages of the business.

Define who will be in particular roles and what duties each role will entail. Figure out who reports to who and there won’t be any leadership battles that so often derail family business matters.

The best way to do this is to simply play to your strengths. If you’ve got a natural leader in your midst, then they should oversee the entire operation. If you’ve got someone that’s good with numbers, they can look after finances, etc.

When you all stick to your roles and work collaboratively, the business is going to be much more successful than if you’re all trying to do everything at once.

4. Create a Family Business Succession Plan

When a family business gets off the ground and experiences years of sustained success, there comes a time when the next generation has to take over. Should you decide to keep the business in the family, you need to start succession planning.

Family business succession planning can be one of the more contentious things a company goes through. If you’re not all on the same page about who will take over, then it could threaten the future of the business. A succession plan should be put in place well before the actual succession happens.

When the successor to the business is pre-determined and all members of the family know about it, there’s little chance of in-fighting. Should the successor be unfit or uninterested in running the company, there should be a backup plan in place as well.

5. Recruit Outside the Family

The core of any good family business starts with the family members themselves. That said, when you start filling positions, you’ll have to recruit outside the family. This goes for lower-level staff and leadership positions.

Any successful company, family-run or otherwise, knows that they have to tap into the talent pool. If you’re only willing to hire family members, you’re severely limiting your ability to find qualified workers.

When it comes to executives, it can actually be really helpful to have non-family members among the top brass. As we’ve said, family dynamics can get complicated. If there’s someone outside of the family bubble contributing to important decisions, your company has more perspective and objectivity.

6. Make Everyone Part of the Family

Yes, you should be hiring outside the company, but the spirit of the “family business” still has to be there. It doesn’t matter that you’re not related by blood, you need to treat all of your employees like family if the family business is going to thrive.

And thrive it will. When employees feel that they’re valued as if they were family, then they’re going to put that much more into the work. You’ll also help to increase employee retention, another crucial aspect of company growth.

Conversely, when you show preference to the family members, you can bet that the non-family employees will take notice. Treat everyone equally and you’ll have the best possible company culture.

Bring In Family Business Consulting

Running a family-owned business is rewarding, but can have more moments of tension and stress than you’d ever imagine. By following these tips, you can keep things stable and productive.

One way to ensure that your family business is on the right track is to hire family business consulting. With an experienced eye on the family dynamics, family business succession plan, decision-making, and functioning of your family-owned business, a business coach can identify problem areas and help you fix them.

At Positively People, we work closely with family businesses using specific techniques and team-building concepts to mold your family business into something you can all be proud of. To learn more about our methods and consultants, visit our website today.

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