Tips on How to run a Successful Family Business

By Soko Directory Team / May 24, 2016



family

Many are the times when reports have come out of family businesses failing due to poor management among other family issues that may end up ruining smooth running of operations. Management problems in a family business owned are somewhat different from the same problems in a non-family business. When close relatives work together, emotions often interfere with business decisions.

In some family companies, control of daily operations is a problem. In others, a high turnover rate among non-family members is a problem. In still other companies, growth is a problem because some of the relatives are unwilling to cultivate profits back into the business.

It is very possible for a family to run a successful business, only if a number of issues are considered by all the members in the business.

Make a Plan

Get as many agreements settled ahead of time. Each family member should be given a specific role and clear expectations. These rules set in the beginning, even if they seem redundant, will save your business from trouble later on. Make an effort to meet in a serious and professional environment, so that inner-family relationships don’t transfer into business ones. Also, be sure to document any relationship like marriages or others, held between partners in business.

Have well defined roles for everyone

Establishing boundaries and having clearly defined roles, responsibilities and authority can determine whether a family business will succeed or fail. In a family business, order is even more important than it is in any other kind of business.

Read: Challenges Facing Family Businesses and How to Overcome

 Separate family matters from Business Matters

Family members typically have insight into each other’s personality and thought process that non-related business partners wouldn’t have, making crossing the professional line into personal terrain tempting. While lashing out at a co-worker wouldn’t have been thinkable in her corporate.

 Separate Personal from Professional time

While ideally acting as a family at home and professionals at work, most family-run businesses operate on both levels at all times. The business has to be run in a different way than the family is run, who recommends setting time limits on business discussions at the dinner table to allow everyone involved a break from their respective jobs.

 Make Rules and Responsibilities to be followed

Members should know how to behave and know what they have to do. This doesn’t mean your family business should be run like a military operation, but an informal business in a casual environment should still require formal structures to rely on. “There has to be somebody in charge,” Coakley says. Think of it as a family constitution.


Article by Vera Shawiza.

 



About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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