4 tips for parents who want to start a successful family business.
Photo by Elina Fairytale
You want to start a business with your family concerning a long-time passion, but second-guessing and the unknown stop you from progressing. Multigenerational companies could bring a family togetherness and freedom — if they execute it properly.
It sounds like a riot to earn tons of money alongside your loved ones, getting rid of all your financial concerns forever. However, it requires dedication and practical thinking to overcome potential pitfalls. These are the top tips for new owners to set themselves up for drama-free operations and a happy family.
Set expectations for succession
Regardless of the company you want to start, family buy-in is the most critical factor in family businesses. No matter how passionate you are about the endeavor, is that same excitement manifesting in children, spouses or partners, siblings, parents, or extended family and friends? If so, how long will that last? It’s vital to know how deep their commitment is to set up a realistic succession plan — especially regarding shareholding and transfer of ownership.
For example, your aunt may be ready to take on a full-time gig to be your accountant. What if something happens in their life where they have to move or can’t work full-time? Succession planning should have back-up plans upon back-up plans, including exit plans for members who want more flexibility. Unpredictable situations occur and life plans change.
It’s imperative to consider this with children, mainly if the company is formed when they’re too young to know what they want to do. Family-owned stores can offer chances for kids to take up the banners, but it shouldn’t be an expectation. Nobody wants a legacy forced upon them, so take care when asking for the opinions of youth, and manage succession with care and appropriate expectations.
Define your family image with marketing
Entrepreneurial families have a unique dilemma — some branding is within their control, and some isn’t. It’s because some branding revolves around the family image. How the family acts, appears, and communicates will interweave with other creative decisions like branding colors and advertising methods based on a target audience. Families must ask how to combine these worlds for a seamless promotional strategy.
The beauty of looking at the family as a model is the business tone can be more cohesive while still defined. Is the company going for a more tongue-in-cheek attitude or luxury professionalism? It’s best to align more with the natural values of the family so it appears as organic as possible.
Know value outside your family
There is strength in numbers and it’s easy to see how the combined knowledge of your family could total a vast well of intellect. However, it’s not all the information you need to run a profitable, stress-free operation. Just because it’s a family business doesn’t mean you can’t seek outside help when educating yourself on entrepreneurship, management skills and the headache-inducing admin side. This includes hiring staff outside of family and friends for a fresh perspective.
For example, you may run an e-commerce shop with your family and many returns are coming through your email inbox. Does your family have the market research knowledge to know 75% of shoppers make online purchases based on product images and if they don’t match up, they’re likely to return them? It’s more likely that tips like this come up in budget meetings if professionals inform ideation and process development sessions.
You can schedule appointments with private coaches or local nonprofits that assist in building sales know-how. Online courses and local universities also have a wealth of free resources. Even if you’re not enrolled, a family venture might catalyze a new educational path in life.
Foster balance inside and outside company doors
The family and business won’t succeed if everyone is hustling dawn-to-dusk shifts and constantly swimming in a sea of work when they’re supposed to be fast asleep. Owners must instill firm boundaries so everyone — from children to pets to distant relatives participating in the exciting frenzy of the family business — can take time off and shut down mentally when necessary.
It’s more than a mental boundary, as well. There are tangible measures, habits and documents families can arrange to keep everyone content. It helps keep personal and work lives separate — especially when all you want is a relaxing family dinner and it turns into gossip about coworkers.
How are the HR policies and benefits helping promote an environment that’s creating healthy work-life balance and relationships? Is there an expectation to be available all hours of the day? Is the store in need of more staff to alleviate burdens from others?
A sustainable family legacy
Planning and collaboration are the foundations of a family business that rises above the competition. Organizing a new family project like a company is exhilarating, as it is a test of the collective skills and communication of everyone involved. Inevitably, there will be unexpected circumstances, but outside help and your family are always there to fall back on.