When we talk about a family business, the first thing that comes to mind is the American Dream. And what could be wrong with Dream?
Is there a chance of failure? Some family businesses are successful and many are falling apart. The main question is how to create a family business that will flourish.
With a focus on good examples, we’ve compiled the best tips for anyone looking to build a thriving family business.
Do not neglect formalities and do not sign agreements
Learn as much as you can about a successful business and learn from your lessons. What are the differences between a family business and a classic business? There are many, but this is not a lack of a legal agreement, of course.
Starting with the idea itself, write and write everything down. Life is an unpredictable thing, and you don’t know what awaits you and your partners.
Drafting a partnership or collaboration agreement will encourage participants to do their job effectively, even if things get really bad.
In such an agreement, it is important to find out not only your responsibilities, but also such abstract things as mission statement , business goals, values, and so on. Be sure to include estimated salary levels, schedules, vacations, and other things related to running the company.
Go ahead and define how the fatal decisions will be made? What if one of the partners wants to sell the company? What happens in case of divorce? Yes, this is not a very pleasant and comfortable conversation for a family. However, it is best to discuss these issues in advance and prevent unnecessary negative emotions.
Explore the field in which you want to start a business
The most common mistake that desperate romantics make when looking to start a business in an area they are passionate about is lack of knowledge in that area.
Of course, they know everything about the product creation process. They may even have an idea of how to deliver the service so that customers are happy with the results. That is, they are at the forefront, ignoring what is happening behind the scenes.
Before investing all of your savings into a dining table idea, you should do some ground research. You can even order a commissioned research paper at a trustworthy essay writing service specific to your industry, market situation, etc. This small investment will save you a lot of money and most likely save you real money.
Don’t mix personal income with business income
Small business owners invest a lot in business development. At times it may seem that private funds and work finances are inseparable.
However, it is better to create a separate bank account for family use and another for your company … Such a step will make calculations and accounting easier, and you will see its benefits in perspective.
Treat everyone equally
Sometimes it happens that preference is given to a certain position. transferred to a relative, regardless of their skills, abilities and work experience.
A family business cannot afford to hire people who do not fully contribute to a common goal. Each person has their own strengths and weaknesses, so considering these functions when handing over part of the work a third party might be a good idea.
Most likely, there are practically no specialists in all areas in your family. Sooner or later, you will have to hire someone from the outside.
However, everyone should be treated equally in terms of hiring, wages and promotion. Taking special care of family members will demotivate other employees and create a stressful work environment. Here are some guidelines for recruiting in a family business:
- All family members must have extensive field experience,
- Everyone must have the appropriate qualifications
- The amount of remuneration for family members should not be higher than that of other employees,
- Do not force family members into business.
Separation of personal and working time
Many business owners spend all their free time at work. What happens if your entire family can be identified as “business owners”?
Most likely, your communication within the company is already limited by the problems of the company, and this is just a stage of formation! What’s next?
Make it a rule not to discuss work-related matters and transactions at family dinners, weekends, or vacations. It’s okay if you sometimes have to break these rules. Take a few minutes to solve the problem and get back to family fun.
Distinguishing personal and business issues can seem daunting if your company is your life. However, this rule must be strictly followed if you do not want your family business to end in the first generation.
Once you’ve decided on building a successful family business, it can make a big difference in your life.
Some business owners pay too high a price for their desire to tie family and money together. However, there are dozens of success stories where family passion has become a lifelong pursuit for all members.
Make it your story!