Six Tips to Consider Before Going into Business with Family
Not everyone can go into business with members of their family.
Consultants call this the rule of thirds: only about a third of businesses make it to a second generation, a third of those live to see a third generation, and on and on. This said, there is no shortage of family-run businesses on the Fortune 500 list.
As an executive at a successful, nearly 30-year-old family-owned and family-run business – one where the founder is also my father – I have learned a thing or two about working effectively with family members.
Here are six tips to consider before going into business with relatives.
1. Define specific roles
Family businesses can often begin and evolve organically with little discussion on specific roles. However, it’s important to outline individual responsibilities in the business. During your strategic planning meetings, discuss your strengths and set expectations for who will handle each part of the business. You may want to write classic job descriptions so you have something on paper that clearly defines each role.
2. Planning is everything
Every business must do strategic planning when laying the groundwork – and a family business is no different. Take time to discuss systems and long-term planning, but avoid the temptation to do so around the dinner table. Instead, set up formal meetings and draft official documents. Set individual expectations and define specific roles. The strategy plan set by individuals within a family can form a powerful vision for the future, which will guide the business forward.
3. Work to meet the bottom line
When a family business is in financial trouble, the line between family and business is easily blurred. Make sure every member of the team is clear on the objectives and how to track them. You can work toward this by regularly sharing and analyzing financial data – make it part of your daily update meetings as well as long-term strategic discussions. Also, coming prepared to all meetings with specific, pre-planned agendas will help keep your meetings on track.
Another key component to meeting the bottom line is setting standards for vacations and time off – and sticking to them. Although the entire family may be going on a vacation for spring break, who is going to hold down the fort? It’s important to always keep your business objectives in mind, even when planning vacations.
Lastly, make long-term planning part of the day-to-day conversation. Not only do you need to focus on the present, you should always be planning for the future, which includes discussion on succession.
4. Focus on productive communication
It’s amazing the number of things that can be lost in translation within internal communications in any business, let alone a family business. You may think you have such a close rapport that you understand exactly what your relative means, but it’s possible you are on opposite sides of the spectrum.
Also keep in mind that time in the office should focus on business discussions, not personal issues. Although you may work with family, it’s best to keep a solid line between family and business discussions. As aforementioned with setting up strategic planning meetings at the office – not at the dinner table – the opposite applies for discussing personal matters at the office.
5. Hire outside consultants
One major key to success with the family business is knowing when you should seek outside expertise. There are several periods when consultants can significantly impact business practices, such as during growth, long-term succession planning, or if you are experiencing unresolved conflict. This may include an outside board of directors, public relations practitioners, human resources consultants or individual counselors.
6. Avoid letting succession stress overwhelm you
Although succession planning is important, avoid letting it completely overwhelm you and dominate the daily management conversation. If you feel that your family business will last through several generations, carefully and sensitively consider your options. Evaluate each person’s top skills and how you can groom them to learn everything else. The process is successful if you keep an open mind.
These tips will help ensure that your family business is productive, successful and long lasting. It’s a significant source of pride to work for the family business. Not only do I genuinely like my coworkers, but there is also a common sense of trust, values and a true caring. I have worked side-by-side with my family members for more than 10 years with zero plans of slowing down. In fact, it is just the beginning for us. We are taking the vision my father had when we started the company to the next level.
Heidi Morrissey joined Kitchen Tune-Up, a family-owned kitchen and bath remodeling company with 170 locations nationwide, in May of 2003 at the urging of her father and Kitchen Tune-Up founder, Dave Haglund. During her tenure, she has helped the company undergo a full rebranding and activated the National Advertising Fund. Heidi has significantly grown the sales and marketing departments, allowing her to get out of the day-to-day tasks and concentrate on growing and strengthening the Kitchen Tune-Up system.
After working with the Home Office for more than a decade, Heidi interacts constantly with each individual franchise partner, all of whom she knows by name. Heidi is passionate about bringing an outstanding level of assistance and guidance to each franchise owner.