Of the businesses established each year in the U.S., a considerable number of them are started by family members, especially brothers. However, what most don’t know is that starting a family business has its unique challenges. It’s when the business is in its startup stages that these dangers are apparent. The most common challenge is that family members get on board the startup boat when they don’t know what their role is in the business. It is wise that you be clear from the start about compensation and other details that may prove to be shipwrecking. To set you on the right path to establishing a successful family business, here are common essentials:
Working with family members comes with the challenge of mixing business with family life which can get very volatile. Additionally, such family members can be caught in talk the whole day. As such, ensure you pull the reins on business discussion beyond the office walls.
2. Set methods of communication
You will most likely encounter differences in opinion among other problems. For this reason, consider holding weekly meetings to take into account the far you’ve come and to also address differences and strike a balance in the event of disputes.
3. Distribute roles and responsibilities
You might realize that several family members are qualified for similar duties. To avoid conflicts, divide tasks in advance. No need having the family members continually debating with each other as it will slow down the decision making in the business.
4. Have a business mindset
Many family businesses fail because people place a lot of emphasis on the “family” part and forget the “business” part. In many cases, for a business to flourish, it will mess with family harmony so brace yourselves for this.
5. Take advantage of family-owned business perks
There are numerous benefits to reap from family-owned businesses. One is that you have human capital at your disposal, that is, family members. This might make a difference when it comes to survival, as a family can help provide low-cost labor or inject emergency funds.
It’s very easy to get caught up in favoritism when you are running a family-owned business. You might gravitate towards treating your family members with better care compared to non-family employees. For this reason, ensure that the pay scales, work schedules, promotions, praise, and criticism are all evenhanded.
Setting a business on its own is hard without even including the baggage that comes with family relationships. However, this shouldn’t discourage you from setting up a family business because there are plenty of advantages. Ensure that you seek advice before pitching a tent.