Tips to Run a Successful Family Business
Running and managing a family business is a privilege for many. It is a matter of pride to be able to step into a family owned business that has been successfully running for so many years. However, it is very often a daunting task to be able to keep up and there tends to be conflicts of interest amongst the family members running the business together. Therefore, it is wise to adopt a few strategies for improving the family business that ensure smooth functioning and minimum disputes. Here are 8 tips that help one to run a successful family business.
Share your vision and goals:
When the younger generations get on board, it is vital that they understand what the company’s vision was when it started and discuss with the other partners what their vision and goal for the business is for the future. It is important that everyone works towards the same goal for the success of the business.
Recognize the advantages of family ownership:
It is necessary for every member to treat the family business with utmost care. There are many benefits one gets in the form of help from family at any given time be it physical or financial as opposed to a new business where you have to depend on third parties for help. One should not treat the business in a callous manner or take it for granted that there will be others to cover up.
Divide roles and responsibilities
When starting out, have a conversation about the roles and responsibilities each one is willing to take up. Defining who is going to do what task makes streamlining duties easier. This makes the everyday decision-making process easier and quicker. This saves time and improves the productivity of the business.
Establish clear and regular methods of communication:
In business, disagreements are inevitable. But that should not bog the business down. Therefore setting up clear modes of communication is necessary. There should be pre-decided rules as to how to solve a certain disagreement. Regular meetings to assess progress, discuss any problems and resolve disputes goes a long way in keeping the air clear amongst all working partners
Create boundaries between work and family time
Sometimes in family businesses, it becomes an unconscious action for the members involved to discuss work even at home. This isn’t healthy and does not allow the family members to take a break. That’s why business discussions should be limited to office hours and not mixed with personal and family time.
Require outside experience first
It is necessary for the younger generations to get 3-5 years of experience in the field of work they plan to take up in the business. But this experience should be from another company or business. This gives them an understanding of how business works outside of a family setting.
Seek outside advice
Very often, the decision-making process in a family business can be hampered due to family relations. There comes a lull in new idea generation and creative thinking because of the closed group. Therefore, once in a while it is necessary to seek advice from outside. People who are not affiliated with the business or family can give a fresh perspective and a reality check to the business.
Develop a succession plan
A business without a succession plan is asking for trouble. A clearly defined plan should be drawn out stating all the details of how and when the business will be passed on to the younger generation. The successors should be involved in the management and financial decisions before the succession so that they are equipped to take over when it is time.