What do Comcast, Mars Inc., and Ford All Have in Common?
They all began as family businesses. In fact, many well know American companies begin as family-owned business. A recent study concludes that family-run businesses are the backbone of the American economy. Studies show that about 35 percent of Fortune 500 companies are family-controlled. They represent the full spectrum of American companies from small business to major corporations. However, owning a family company can be a bit tricky at times. Follow these suggestions to help keep things running smoothly:
Set clear boundaries and appropriate times to communicate.
Try to keep home life and company life separate. Limit business discussions and decisions to the office if possible. If you must talk business at home, choose the appropriate time. Consider setting weekly meeting times, in the office, to set goals and monitor progress.
Divide roles and responsibilities.
As in any company, each member of the business (in this case each family member involved) brings their own set of interests and skills to the table. Don’t be afraid to divvy up tasks and responsibilities based on each member’s strengths and weaknesses. Remember, the characteristics of a healthy business may not be harmonious to family unity. It takes a strong leader to make difficult decisions.
Don’t provide “sympathy” jobs and don’t expect that all family members want to be part of the business.
Make sure that your company is not an avenue for your children, or other family members, to employment. All employment decisions should be made on what skills and knowledge each individual brings to the company. If your children do decide to join the family business, require them to have outside experience first – either education or outside employment. Similarly, give your children a choice and let them know that you support their career goals and aspirations even it they do not include the family business.
Treat everyone fairly.
Business plans, policies, and procedures should be put in writing and followed by every member of the business, both family and non-family members. Every employee should be expected to follow the same pay scale, pathway to promotion, vacation policy, work schedule, and review procedures.
Develop a succession plan.
Did you know that the average age of a leader of a family-owned business is 60.2 years old? Developing a legal plan that spells out the details of how and when the leadership of the company will be passed on to the next generation is essential. The plan needs to be financially sound for the business as well as for the retiring family member.
Seek advice when needed.
The decision making process of growing a family business can sometimes be too close – new, innovative ideas get overlooked in tangled family relationships. By seeking advice from an outside source, you can give yourself a reality check and help your company grow to its full potential. Please don’t hesitate to contact DeSantis Trusted Advisors for advice on how to grow and improve you family owned business.
