On one hand, it seems like running a family business would be easy. All the key people are on the same page and they all share the same goals . . . except when they don’t. Running a family business is anything but easy when what’s good for the business is different from what’s good for the family.
TALK ABOUT IT
There are two controlling forces in a family business — the family and the business. Successful family businesses find an effective way of separating the two so that family problems don’t spill over into the business and vice versa. Keeping the lines of communication open on all levels and holding regular business meetings to address and resolve business issues will help establish the necessary boundaries.
Professionalism is another best practice for family businesses. Standardizing operations and procedures and establishing policies can help your family business be successful. If you have non family employees, pay particular attention to personnel issues (such as hiring and promoting on merit and paying market-based salaries). Allowing “special” benefits for family members can be a real morale killer. Providing equal benefits and establishing a family code of conduct will show you’re committed to leveling the playing field.
PAY ATTENTION TO FINANCES
One big reason family businesses sink is poor financial management. All businesses can benefit from establishing proper accounting procedures. Having accurate data allows you to generate monthly financial statements and keep tabs on your current financial situation. You can also spot trends as they develop and be proactive instead of reactive.
Sixty-six percent of family-run businesses fail to survive into the next generation.* You have a good chance of beating those odds if you make succession planning a top priority. Just don’t wait until the last minute. It will take two to three years to design a plan, resolve disputes, and complete a successful transition.
Original content provided by Client Line Newsletter