Managing a successful family business is not as easy as it sounds despite their popularity and undisputed impact on our global economy. As a matter of fact, family members need to differentiate between business and personal relationships to run one. Thriving family-owned businesses depend on a pool of profoundly dedicated, harmonized and unified family members who are determined to work together professionally towards the set goals.
Here are 12 Keys to Family Business Success
For members of the same family to operate a successful family business, there has to be mutual respect amongst them. Mutual respect will undoubtedly open new doors for everything else to come through. Without respect, even simple things such as communication, love, empathy, and tolerance cease to exist thus making it impossible for such families to own successful businesses.
Communication makes everything else possible. Launching a family-owned company becomes possible when there’s flawless communication amongst members. Lack of proper communication can have detrimental effects on the organizational decision-making process among other things.
Have clearly defined boundaries
Setting boundaries is a necessity in any family-owned business environment. Allowing each member of the family to do whatever they want can lead to dire consequences on any business. Things work much better when everyone knows what’s expected of them by others on both personal and business levels.
Successful family-owned businesses thrive better in environments where members know and understand their roles and responsibilities clearly. Unambiguous responsibilities and roles lead to great success, better decisions, family legacy, and improved productivity.
Better succession plans
Great families have better succession plans to guarantee the continuity of their multi-generational family legacy and success in business. Such families devote themselves to passing leadership skills to the next generation effectively thus making them highly successful for many generations.
When members of the same family embrace equity, success in family business becomes the norm. All members are guaranteed fairness in respect to promotions, praise, criticism, work schedules, pay scales and leave days without favoritism.
Put everything in writing.
In successful family-owned businesses, everything is put down in writing. Major business decisions need to be made and officiated with all members expected to abide by them. Being a family does not give any member the right to treat the business like a personal asset. For this simple reason; duties, ownership shares, compensation, and positions have to be in writing to avoid miscommunication.
When it comes to family businesses, members are expected to maintain high levels of professionalism when on official duties without compromise.
Seek Outside Expertise where necessary
Every successful entrepreneurial family knows the importance of hiring proven expertise when necessary. It’s worth recruiting a trustworthy, reliable and experienced professional particularly when it’s lacking internally for the sake of business growth and development.
Dedication and commitment
Family members are expected to fully devote themselves to helping their business success in all aspects without negotiation.
Have a strong advisory board
An active and strong advisory board is one of the key elements of running successful family businesses. Whilst some families dismiss the importance of a legal board of directors, an active advisory board is vital for any family business to thrive.
Strategic and innovative
With family-owned businesses topping most global economies charts, it is important to have highly-effective strategic and innovative plans in place at all times. In other words, strategic planning and innovativeness lead to success.