You may be well-acquainted with various business strategies and tactics and are knowledgeable about how to properly apply them when necessary. However, you should note that there is a lot of family businesses out there that have had this unique kind of experience of the whole endeavor. And through the time that they have spent working as a family, they have accumulated certain knowledge that may prove very useful to you. Most common family businesses include restaurants, clinics, law firms, retail outlets, and the like.
So, if you ever thought about starting a business in your family, you should listen to the lessons that they have learned and apply them to your future business efforts. It’s somewhat different from starting a business with a friend or an experienced acquaintance, so there are certain things that you should have in mind when doing so. In this article, we are going to cover some of those lessons, so that you have an idea about what you are signing up for.
How to govern a family business
One of the most important steps when starting a family business is to make sure that it is governed properly. It is pretty much impossible to manage both the talent within the company, as well as drawing outside talent if you don’t have proper practices in place with the focus on separating the family and the business. This is best done by having a professional board. The fact is that people are very often uncertain about joining a family-run company because they worry about how it is managed, how much autonomy they will have, whether the family has certain agendas of its own and the possibility that nepotism and unreasonable decisions will take place due to “family reasons”. Everyone working for your company wants to know that they have the same opportunities for advancement and growth as the members of the family and that the company is run professionally.
So, basically, if you want to run a family business and attract and retain brilliant workers from the outside for a long time, you need professional governance. This means that decision-making needs to be perfectly reasonable and equally influenced by everyone.
It definitely isn’t for everyone
What you need to be aware of is that running a family business certainly isn’t for everyone out there. Quite often, people avoid opening a business with their partners, children, or parents, because they believe that it can have a negative effect on their relationships. And, let’s be honest, it can happen. Therefore, if you do decide to start a business together, it is one of the primary things that need to be apprehended.
Before anything else is said, if you have certain issues within the family, such as problems with your in-laws or children, or something worse, such as a health problem, then you need to be aware that starting a business together will in no way fix those problems. In fact, it will complicate them even further, and make them extremely hard to handle, which is something no one really wants.
However, even if your family is working quite well, and your mutual ground is strong both in terms of feelings and finances, it can still be quite problematic to develop business relationships in that kind of setting. As we have previously ascertained, it is vital that you separate the family from the business, in order for the latter to function properly. And the fact is that these lines tend to get blurry within a family. This is why you need to firmly stick to practices and not allow unsuitable habits to creep their way into your relationships. According to the advice from a business agent in Sydney, it may be necessary to look for help from a professional who can guide you through the process and aid you in terms of overcoming such obstacles. If that doesn’t work, then maybe a family business really isn’t something that you should go for.
Know your family
In every business, you will hear that it’s important to know yourself. However, when it comes to a family business, it is much more important to know your family as a whole. Learn the strengths and weaknesses of every family member, and how you can hone their skills in order to boost your business efforts. Sometimes it will be smart to listen to your elders. Your parents and grandparents may have a certain amount of experience and wisdom that can really help the family business in its endeavors. Also, learn from their mistakes and do your best not to repeat them.
Stress management is vital within every business, particularly in one that is run by a family. Due to the depth of your relationships, business efforts will affect the way the family dynamic. While, yet again, it is vital to separate the business from the family, it doesn’t mean that it is possible to completely avoid the effects that such an endeavor is bound to have on everyone. However, as long as you act the same as you would in a business environment – respect everyone’s opinions, skill sets, talents, and efforts, all the while maintaining the context of a family-run company, you should be fine at avoiding conflicts that can ruin a family business.
Running a family business can be a difficult task if you don’t govern it properly. There needs to be a body, such as a professional board, that is going to oversee and manage all the business efforts. It certainly isn’t made for everyone, as some families have their own issues and simply cannot handle entering a business relationship as it will only deepen their struggle. But if you choose to go for such an endeavor, make sure that you know your family’s strengths and weaknesses well, and that there is a fair and professional relationship within the company so that potential family conflicts are avoided.
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