How to start a successful family-owned business

How to start a successful family-owned business

 

Creating a family run business can be an exciting project, establishing a successful and profitable company through which your relatives can prosper. No matter what industry you choose to launch your family start up however, there are a certain number of unique obstacles which you may face whilst running your company alongside your relatives. This blog will address some of these issues and how best to approach them to ensure every success for your business.

Establishing the employment roles in your family business

The primary challenge which entrepreneurs will face when starting up their family-run business is the unique dynamic between family members. Typical business partners tend to be friends or colleagues, but family members bring an entirely new relationship to a business. It can therefore be easy for certain individuals within the business to fall into the same favourable habits they may have at home. This can blur the line between whose job is whose and can quickly escalate to conflict within the team.

To avoid this, the business plan for your family business should be explicit in the roles which each family member will take. The explicitly will lay down whose duties and responsibilities are whose and therefore means employees can easily differentiate between roles. This will help focus the processes of your business as everybody knows the job they have to do. This also extends to the succession of the business’s ownership. Writing down a set process for handing over the business should be established in your business plan to help avoid any potential conflict.  

Standardise recruitment within your family-run business

As a family run business, falling into situations where you may find it difficult to refuse a request can be commonplace. A prime example of such a situation is recruitment. Many relatives may think or even expect you to offer a family member a role within your company. It is important however that you don’t just blindly recruit every relative who needs a job, as it could be to the detriment of your business.

Establishing a standardised approach to recruitment will ensure that all family members will have to meet certain requirements should they want to be considered for a certain position. Although this doesn’t have to be a particularly stringent process, this standardisation will establish a certain level of clarity for many other elements of the business, including salaries and business benefits for example.

You should also be very conscious that you treat any employees who are not family members equally. It can be easy to offer favours to your family members whilst negating your responsibilities to other employees. As a business start-up, this should be a key concern to maintain employee morale and a friendly working environment.

Ensuring you separate family from work

With the close relationships between family members in the business, it can be easy to lose yourself in the grey area between family life and work life. You should establish a set of boundaries for your family members to obey to be able to switch off when the work day is over. It is important for employees to be able to close off business concerns whilst they are away from work to ensure they are not consumed by the business all day, every day.

In extension to this point, you may find yourself drawing a blank when the business is faced with a problem. One potential cause for this could be being surrounded by like-minded thinkers, with many employees being relatives, so you should consider working closely with an external business advisor for example. This exterior, objective party will help the business with a fresh perspective and can even act as a mediator in cases of conflict.

Establishing the boundaries of your family-run business should be a key element of your business plan. If you would like help with putting together your business plan, get in touch today! Contact us online using the form on the right or call 01604 420 420.

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