Owning a business is hard enough without the potential sticky situations of family relationships. We love our family members, but nothing tests your love for one another quite like working together. Though there are many advantages to a family-owned business, starting one business requires a few extra steps to promote harmony and avoid burnout.
Problems and differences of opinion are inevitable for any business, but heightened in a family-owned operation. Consider integrating weekly meetings to assess progress and to bring light to any differences. It is helpful to divide roles and responsibilities from the beginning to avoid conflicts. Big decisions can be made together, but a dispute over every little move will surely be incompetent.
Apply great emphasis on the fact that it is a business and needs to be treated as so, with seriousness and respect in order to function properly. Many times what a strong business requires may not always collide with family aspects. Be prepared to face those situations if they arise.
There are many unique benefits of a family-owned business. Often times family members will care about your business more than people who aren’t family. They might truly invest themselves. This could make or break you when you’re seeking low-cost or no-cost labor, or emergency loans. A trusted family member can also come in handy for special accounting systems, policy manuals and legal documents.
Some people advise against hiring family members at all; however, qualified family can be one of the greatest assets to a business. Countless companies wouldn’t have survived without the energy of dedicated family members.
Put Business Relationships in Writing
Family can easily get wrapped up into a business startup without knowing what they’ll get out of the business relationship. Avoid miscommunication by creating a document that defines matters such as compensation, ownership shares, and specific duties.
Never provide “sympathy” jobs for family members, because becoming the employer of last resort for your kids, cousins or other family members will not turn out well. Employment should always be based on the skills and knowledge each individual has to benefit the business.
Treat all family members fairly and avoid favoritism. Pay scales, promotions, work schedules, criticism and praise should be even between family and non-family employees. Do not hold family to a higher or lower standard than others.
In addition, make sure that the operation is protected with a comprehensive business insurance policy. It’s a common mistake for people to assume that they won’t need coverage for their family members because they completely trust them, but mistakes and incidents can happen, and every business needs protection.
Seek Outside Advice
Decision-making for a family business can sometimes be in need of fresh and creative ideas. Seek guidance from an outside source, not affiliated with any family members can be the best way to give the business a reality check.
Also, professional advice for a formal succession plan is needed. The plan should outline how and when the company will be passed to younger generations. It must be financially sound for the business and retiring family members.
About Sine Insurance
At Sine Insurance Group, we are dedicated to providing you with custom tailored insurance policies to protect your assets. Our comprehensive packages have been expertly crafted to serve St. Louis and the surrounding areas for the past 25 years. For more information about our products, contact us today at (636) 947-1177.