The Triumphs and Pitfalls of Running a Family Business

July 29, 2014 1:45 pm Published by

Owning and running family business can be a charming idea.  And it can be a really fun experience!  But it can also have its own very unique set of issues.  Before jumping in, consider some of the following items.

Communication

You’ve been around your family for your entire life.  Much about how you interact with one another is assumed.  You each assume that you know what one another is thinking, or how one another will react to a decision. You might assume you told someone about something but you actually forgot.  Or you might have issues with communicating in a way that is respectful to one another, if you’re used to teasing the youngest cousin a bit too much.  Whatever it may be, this can be a trial with a non-family-based business.  Add family to the mix, and it gets loads more complicated. No one wants to offend their loved ones – or their boss – because of poor communication.

But on a positive note, since your family probably knows you better than anyone else, there can be a great ease with which you and your family discuss vision and strategy.  Having a similar outlook on life and a common foundation for your goals can go a long way towards building strategic plans, for example.

Roles

In a business environment, successful teams will have people in roles based on their combined strengths, skills, and experience.  In family, roles are usually related to order of birth.  When you combine those two worlds, you may experience some confusion as to how to report to a superior who you used to tease mercilessly, or share a room with, or more.  Identifying the proper roles in a workplace can feel awkward and challenging with family members.

On the other hand, it can be very empowering for the youngest sibling to earn the respect of his or her older brothers and sisters!  Or for the nerdy cousin to be the one who holds all the technology together for the business.  So our tip to you is to navigate this carefully, be clear about what the office roles are, and treat one another with the kind of respect you would a coworker.

Policy

In the workplace, policies are required for everything from employee benefits to retirement savings to how long the lunch break is.  Creating these rules for someone you haven’t met yet is one thing, but creating them for people you love – and people whose habits you already know – can be a bit more sensitive.  Be sure to approach things like this with a clear head.

Exit Planning

Exit planning can be tricky for anyone, but when suddenly you’re considering which of your children both wants to step up and has the right skills to take over the company, there are personal elements which can be devastating to the business – or the family.  You’ll definitely want to consider whether your council or board should have input on decisions like this.

But what a joy it is to be able to retire and hand the reins to someone you love!  Who else would you rather have take over the business you built with your own blood, sweat, and tears, than a family member?  This is a definite bonus.

So if your family is considering starting a business, or if you’ve started and now you’re seeing some of the issues pop up, give us a ring and we’ll help you out.

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This post was written by M3evolve