Top 10 Tips for Family Businesses

Many of the UK’s growing business are family run and while there are a whole host of benefits to working closely with the ones you love, the dynamics in the family-owned business can host another set of challenges.

Here are some tips to help mitigate potential problems;

  1. Communicate often, regularly and with a set agenda. It’s far too easy to get side-tracked talking about more personal family matters and avoid in-depth and strategic business-related discussions. Carve out time on a regular basis to talk about nothing but business in a structured way.
  2. Keep business and home separate. In keeping with the prior point, business belongs at the office and personal matters belong at home.
  3. Document, document, document. The failure to document in writing what has been agreed upon between family members who are in business together is probably the number one most costly mistake family business owners make. There is no place for “trust me” or “I’m insulted” when it comes to business. You must clearly define the terms of any business relationship in writing, family or not.
  4. If things get tricky, hire an outside facilitator. Hire a pro to help you settle your differences sooner rather than later. It’s a lot cheaper than ending up in a court room.
  5. Invest in training and professional development. Although a business owner can certainly pass along much of his/her wisdom to the next generation, there’s always room for your staff, whether they are family or not, to improve their management, administrative and other business-related skills. As a bonus, they’ll probably come back with a thing or two to teach you too.
  6. Hold family members accountable. Family members must be treated the same way you’d treat a non-family member in business; they must be held accountable for their actions or lack thereof. This is critical if you want to lessen the possibility of resentment within your organisation.
  7. Foster inherited professional and personal alliances. Introduce your key personal and professional contacts to your successors and foster those relationships wherever and whenever possible.
  8. Know that a good idea is a good idea. Don’t be too proud to accept a good idea when you hear one or to change the way you do things when it’s the right thing to do, even if the idea or suggestion comes from a family member who is younger or with whom there may be some rivalry.
  9. Worry about fair, not equal. Pay and compensation among family members should be based on fair market value, not some misplaced commitment to everything being equal. Fair is not always equal, and equal is not always fair.
  10. Formalise a succession plan. Your business succession plan is every bit as important as your personal estate planning. Failing to plan for the future of your business means you’re really okay if it eventually collapses. The question is, “Are you?”