Many successful businesses are family businesses, whether it’s a whole family affair sharing the workload or two relatives in partnership. In fact, some of the largest and most successful corporations in the world started out as a family business or have two or more family members involved – such as Walmart, Samsung and Nike.
Nevertheless is it usually smaller businesses which are family owned, such as local shops, restaurants, takeaways or pubs. While a family business can be a great legacy to pass down to children, and a good way to support the whole family, there are also many challenges to consider. When business becomes personal, tensions can rise and running a family business can be a very different experience to running a commercial business.
If you’re thinking of going into business with your spouse, siblings, children or other family members, think carefully about how it could impact on your relationship. Not all family businesses survive until the next generation – so follow these tips to make sure your family venture is triumphant.
Recognise the importance of outside input
With any company it’s good to get an objective view on a number of business matters – and a family business is no different. Family relationships can automatically hinder creative thinking and decision making, so asking an outsider to offer their opinion can be invaluable. Anybody giving advice should be totally impartial and unbiased towards any family member.
Don’t skip the legal paperwork
Whether the business is a partnership or limited company, it’s important to take the legal side seriously from the beginning. The business plan needs to outline the responsibilities of all business owners and shareholders, and what should happen in the event that somebody passes away or wishes to leave the business. You never know what the future holds – so be prepared.
Utilise the advantages of family ownership
One of the reasons why there are so many family businesses is because the model works so well. Recognise the benefits of keeping it in the family – you have access to low cost or free labour if necessary, to keep running costs down and increase profits. You may not ever have to hire someone outside of the family, which can save you lots of time and money in the recruitment process.
Keep business separate
One of the best rules to follow is to keep business separate from your home and personal life. Is a special family occasion such as a wedding or funeral the appropriate time to discuss the business? No. Set some boundaries and try and keep business conversations outside of the family home.