Starting a business with a spouse, parents, siblings, children or other family members is not like the typical startup.
According to the Family Firm Institute, family-owned businesses comprise two-thirds of the companies worldwide. However, only 30 percent endure into a second generation, 12 percent to a third, and 3 percent to a fourth.
The typical snare of a family business is putting too much weight on family and not enough on business. Rarely are the qualities of a healthy business entirely compatible with family harmony. When the business is going well, there will be jealousy. When it is going badly, there will be blame.
The earliest stages of a family business are the most ominous. Family members can join the promise of a new venture without clear definitions of their roles, duties, compensation–and, should they become problematic, exit arrangements.
To avoid miscommunication and hard feelings in the future, advises StartupNation.com, always put family business relationships in writing.
While various family members may qualify for similar duties, they must be divided up to avoid conflicts. Significant decisions can be reached together, but disputes over minor procedures impede the overall progress of the business.
The dominant structure of a thriving family business is having one person serve as the ultimate leader of the endeavor. When this leader is resilient and competent, he or she can persevere, stay focused, and proceed with their responsibilities and intentions despite the obstacles and challenges.
These capabilities are especially essential in a family business where professional and personal issues frequently become intertwined.
Leaders of strong family-owned businesses know that setting boundaries among participating family members is critical to continuing success. Precise methods of communication must be installed.
Since business quandaries and differences of opinion are inevitable, consider weekly meetings to assess current progress and plans, air differences, and resolve disputes. Moreover, keep family issues out of the boardroom and office.
Keeping pace with the times is vital to any business, more certainly those with multigenerational roots. Regardless of age, family members must continuously evolve and deliver or risk alienating both employees and customers.
Furthermore, so-called sympathy jobs should not be open as a last resort to children, cousins, or other family members for any reason. Employment must be based on the experience, knowledge, or skills a family business demands.
For leadership and staff positions the business demands, look outside for the qualities family members do not possess.
