Companies with multiple family members in the ranks face a unique set of problems, since their personal and professionals lives are so entwined. While there are hurdles that can trip up family businesses, the good news is that they can be avoided and, if need be, corrected.
1. Inequity Between Family & Employees
Disparity in a family business can manifest in a few ways. One way is giving perks to family members that you wouldn’t offer anyone else. For instance, does your brother take the car on family car trips that are not related to business? If yes, would you let any of your other do that? A good rule of thumb it to treat those with familial relations just like those without.
As the owner or manager of a family-run business, you also need to make sure that you dole out discipline equally amongst your staff. The same goes with praise. In the office, no one should be punished or rewarded for anything besides their contributions to the company.
2. No Boundaries Between Home & Business
There are many boundaries companies have in place for the overall health of their employees such as no calls during a staffer’s off hours unless it involves a once-every-10-years type of emergency.
But family businesses need to add an additional few. These could include no talking about work after 6 p.m. or on the weekends, no discussing it anywhere but the office, and taking different cars to work. Some couples with a home office take it even further and lock their office when they “leave” for the day. Find what works for you and your family.
Even though this can be difficult, it is vital for the health of the family (and marriages) that work be left at work as much as possible.
3. Arguments Between Family Members
How can you handle disagreements between family members? First, remember to keep it professional. Remind your staff (or yourself) that you are in a place of business. If you wouldn’t talk to a nonfamily member in the same way, then you don’t need to be speaking that way at all in the workplace.
Implement a policy where shouting or disrespectful behavior won’t be tolerated. Ask anyone that exhibits these to leave the meeting. This policy will apply to everyone – those with familial blood and others – to ensure that your team feels you are a fair leader.
If you’re having difficulty approaching an area of concern with a family employee, consider trying the DESC – Describe, Express, Specify, and Consequences – conflict resolution method. Learn more about it from Bloomberg Business.
4. No Succession Plan
We tend to procrastinate and avoid making tough decisions. Who wants to deal with something that’s not particularly fun and could bring conflict? No one I know.
I understand the tendency to put offplanning or succession planning, but having a roadmap in place is the only way to ensure not only the future success of your company but also the future stability of your finances. For example, if you’re planning to transfer your business to your children, you need to make sure they have the skillset and leadership required to run the company and make it thrive in your absence. If he or she doesn’t, (since most inter-family transfers include some form of an earn-out) you’re going back to work and not getting the payout you were counting on.
Failing to set aside time for succession planning is one of the biggest mistakes you can make as a business owner. While it’s overwhelming, just start somewhere. Learning about what it takes to have a successful plan is a great first step.
And Remember This
You are not alone. Someone has been in a situation similar to yours. After all, 90 percent of all American businesses are family owned or controlled by a family, according to Forbes. When you’re down, consider calling your mentor or someone else that runs a family business.
Also, you’re going to make mistakes – that’s expected. Just remember Ralph Waldo Emerson’s words: “Our greatest glory is not in never failing, but in rising up every time we fail.”
Learn how to prepare your company for your exit through a free whitepaper from the merger and acquisition experts at Generational Equity.