Contact Us to learn more about our services.
5 Tips For Running a Family Business
For some business owners, the Thanksgiving table won’t look much different than a board meeting. Running a business with your family can be deeply rewarding – but it can also mean unique challenges for operation management.
Whether it’s a brand new venture or a company that’s been in the family for decades, every family-run business should take active steps to make sure their business and family relationships thrive. Here’s our tips:
1. Get some outside perspective
Add balance to your business by including non-family voices in your team. Hire advisers, board members, and employees that aren’t family members, and make sure their perspectives are treated fairly. By hiring people from outside your family, you’ll make sure you are getting all the skills you need in your operation, and you’ll have an outside perspective to help separate family problems from business ones.
2. Train the next generation (and then hand it over):
One of the most rewarding parts of a family business is involving the next generation. This is especially important for agriculture businesses: many family farms don’t have a clear plan for transition to younger owners. To make sure your business is left in good hands, make sure you’re actively training your younger family members. Pay them a market wage and make it clear that there’s no free rides just because someone’s family. If your children, nieces, or nephews are involved in the business while they are young, make sure they also have the opportunity to try jobs and explore interests that have nothing to do with the family business. They might find the family operation isn’t for them. If they do want to come back, they’ll bring new skills and perspectives with them which might help improve your business methods.
For more tips on transitioning your agricultural business, see our blog 5 Steps to a Successful Farm Transition.
3. Remember, it’s a business.
No one wants to be saddled with an employee who isn’t doing their work, whether they’re family or not. One of the biggest downfalls of family-run businesses is allowing for more inefficiency and miscommunication than any other business would tolerate. Use business management tools like contracts, ownership agreements, annual reviews, position descriptions, and audits to make sure that your employees are getting the work done and your business is thriving. Documentation about expectations and performance can help keep everyone on track and be a record of any issues that arise. Documentation also makes sure everyone is on the same page with long-term expectations about ownership and succession.
4. Maintain boundaries
Every family-run business has to find the right balance for them between family and business. Some businesses don’t let family matters come into work, while others talk business at the dinner table. Find the balance between work and family that works for you all, and stick with it. Don’t let family matters become disruptive to work, and don’t let work take over your time with family.
5. Establish a chain of command
Make it clear to everyone how decisions are made, and by who. Whether you opt for a traditional hierarchical chain of command or some other structure, make sure it’s clear to all employees. In a family business, family and business power structures can become mingled, putting strains on employees and managers. Provide everyone with appropriate chances for input, but also make it clear when something is not up for discussion by everyone with your last name.
And our most important tip: Don’t forget to have fun! While they might know how to push all of your buttons, family members can also be some of your closest friends. Make sure to set the work aside once in a while to spend time together just for fun.