Working alongside family members can be amazing and may sound like the ideal scenario for many entrepreneurs, but running a family-owned business can also present sticky situations. Here are some tips to protect your relationships with family members and at the same time ensure your business venture is successful.
Put it in writing
This is possibly the most important rule when it comes to setting up a business with family. You may be tempted to keep processes informal rather than setting an official agenda but this approach could backfire and give rise to unclear procedures, misunderstandings and eventually friction. Written agreements can provide a framework for all employees, whether they pertain to working hours, salaries, time off or performance evaluations. A formal, written job description for everyone on the payroll will ensure there’s no ambiguity when it comes to responsibilities and expectations. Do not assume that you can predict how a relative will deal with a business matter just because you know how they behave in a relaxed setting, outside a professional environment.
During initial meetings when the foundations of your business plan are being set, it’s key to discuss how decisions will be taken. Remember, you don’t have to designate one person for all areas of the business, but you need to be clear about the level of authority people can have and the types of decisions they can make as part of their job profile. This will greatly help to avoid confusion or even tension between family members.
Strike a work/family life balance
You may be surprised at how easily the line between work colleague and relative can be blurred. Try to avoid talking about the next business deal at a family meal, regardless of how exciting it may be. If you happen to work with one of your children, do not treat them as employees outside the office; instead continue to create family memories that they will cherish. Despite running a business with my father and brother, we all aim to leave work talk in the office at the end of each day and make it a rule not to discuss business at family gatherings. Equally, we are more formal, professional and respectful of each other’s expertise during business hours.
Don’t just keep it in the family
Don’t hesitate to bring an ‘outsider’ on board, someone who may not be related to your family but who you feel shares your entrepreneurial vision and ethics and can be a winning addition to your team. They will breathe fresh ideas and perspectives to support your business and their approach will be a welcome change to the all-too familiar viewpoints in the boardroom.
Make future plans
A tricky one, because a lot of family-business owners take for granted that they will pass their company down to the next generation. This is a wonderful thing to happen as it strengthens the family bonds and the reputation of the business, but what if your family members do not share the same wish? If you’ve worked hard to found a thriving business, you would want it to continue being successful after you retire. Discuss succession plans with your business partners early to allow you to explore your choices.
By Sam Wilbraham, director of award-winning oil filter brand, FriPura