How to manage a family business
According to Family Firm Institute's Family Business Review, there are currently 24 million family businesses in the United States. Family businesses have been around for hundreds of years and many people enjoy the freedom of working for themselves. Running a family business is a time consuming job and often can be stressful if your relatives are your employees. Here are a few tips for managing a family business:
Keep Family and Business Separate
This is a hard area for many family businesses. Most people are good friends and have known each other from the time they are born. It is hard for some people to take orders from their uncle who was at their house last night for a BBQ. Make sure to draw a line between family and business. Set the boundaries at work that personal life is not to be involved in work life. People should not take it personally if they are chastised for their work by their father, mother, or brother who is their manager. It will help if you can have family members report to non-family members. Other employees at your company should be responsible for overseeing other family members instead of you overseeing them. This will help eliminate any personal bias you may have and alleviate hurt feelings or grudges that could arise.
Have a Plan
If you are inheriting a family business, there is probably a strong family plan already in place. If you are starting your own, develop a plan that can last for years. Do you want your children to inherit your company and keep it in the family? Are there certain values you would like to establish for your company? Develop a good succession plan to pass down your company or to have it sold.
Once you have developed your plan, decide what type of requirements people need to meet in order to work there. Would you like everyone to have a college education? Before employees can be eligible for a promotion, would you like them to work for the company for at least 3 years? Set out rules like these that can be followed for future generations.
Have Proper Communication
Like any other business, open communication is essential for running your family business. If your family employees or other employees are not communicating with one another, then all it is doing is causing problems. Discuss the goals of the company with each employee and go over results from hard efforts on everyone's part. Allow everyone to have time to discuss their concerns, problems, and challenges. With everyone involved in a solution, the company can keep moving forward.
For many family businesses, having an H/R department is an added expense that they do not find necessary. An H/R department is one of the best investments you can make in your family business especially if you have family members working for you. A person who is not related to any employees at the company will have an un-biased opinion and will be able to resolve challenges and issues that arise from family members working together.
Many businesses will not allow two people who are related to work in the same department. This is an effective method to prevent personal problems from arising in the workplace. Along with this plan, you should always try and have family members report to different non-related supervisors or managers.
Operating a family business can be a lot of fun for everyone involved. If you are a smaller company, you may have a few run-ins here and there with family members, but it is best to not let personal feelings get in the way of business.