How to run a successful family business
Running a family business is a great way to pool resources for a rewarding venture. Indeed, family businesses form the backbone of the UK economy, contributing significantly to growth, innovation, and employment. A recent study shows that over 4.8 million businesses are family-owned. However, this business model has unique challenges and opportunities, so keep this in mind. Do you want to start one but are unsure how to navigate the complexities? Below are four top tips on how to run a successful family business.
Examine your relationships with others in business
Aside from your knowledge and expertise, your connection with the company’s staff is also vital when operating a family business. Some persons involved are somewhat passionate about their beliefs and can be tough to deal with, making it crucial to know how to communicate effectively with others. If you can, it’s advisable to designate yourself to a distinct area where you can give your best with minimal interference from others to help reduce the likelihood of conflict.
Set some limits
Setting some limits is essential when running a family business, as combining work, personal, and family life may not always work well. Boundaries give discipline and clarity, allowing family members to distinguish between professional and personal ties and reduce conflict. It’s also best to keep business talks to a minimum outside the workplace to help achieve work-life balance.
Regarding sustainability and profitability, moving with the changes is critical for any business, particularly intergenerational family enterprises. A family-run enterprise should be willing to embrace change, such as new technology. It is crucial to put the business interests above everything else, regardless of age and individual interests, and adapt or risk alienating employees and consumers. For instance, if your business uses large-scale machinery, tools like electric linear actuators can greatly reduce downtime since they are clean and require minimal maintenance. You can also explore various tools to keep your family business modern and updated, so feel free to consider this.
Document everything and have a succession plan
It isn’t difficult for close relatives to be attracted to a company launch without a clear plan about what they will gain from the partnership. Putting anything on paper that describes remuneration, ownership shares, tasks, and other items to avoid hurt feelings or misinterpretation is prudent. Additionally, a family business could face challenges without a documented succession plan specifying how and when the torch will be handed to the next generation. It must be a financially solid plan for the business and retired family members. Like most successful family businesses, you could bring in an expert to assist you in developing a succession plan for the next generation.
It’s difficult enough to start a business without the extra risks and possible challenges that come with handling family connections. If your startup is a family firm, you’ll need to consider the above tips and explore a few more to ensure the enterprise’s longevity and success.