Over the last decade Nate and I have built a successful family business. How we have done this is one of the major questions we get from a lot of our readers. I'd love to share some tips that have worked for us over time.
In the United States a large percentage of businesses are family owned businesses and they have been said to contribute about 57% of the GDP and employ 63% of the workforce. As unbelievable as this may sound – yes – family businesses in the United States currently employ over 98 million people. That's really huge!
After building a successful family business from experience, I can tell you that a lot of unexpected things can pose a challenge. By unexpected, I truly mean UNEXPECTED in every sense.
The things you would think are supposed to HELP you build a successful family business? When stretched and overdone, they can pose threats to your success. That's why it's very important for families to seek and gain more knowledge on the ins and outs of building a strong business that will be passed from generation to generation.
Here are some of the best tips to remember if you are aiming to build a successful family business
- It's A Business: I'm starting with this first because this is a major area of struggle for most family owned businesses, which is why only 1 out of 3 family owned businesses are successful and passed on to another generation.
Always treat your family business like business. Don't downplay your part of the work because it's your family, and don't allow anyone else do that. As much as you all want to live in love and harmony, neglecting work and taking advantage of the fact that a business is family owned will send it to an early grave.
- Efficient And Clear Communication: Set out a clear communication pattern. Do not assume that everyone knows and understands each other just because you are all family. This never turns out well.
Schedule compulsory weekly meetings where everyone gets together to communicate and discuss strategies and progress. Don't just stop at scheduling, though! Whether your family business runs mostly online like ours or offline like many, make sure to follow through.
- Separate Business And Personal Life: Remember when I mentioned the unexpected things that may pose threats? This is one of them. Your family's inability to keep personal lives separate can come back to hurt the business.
When you come to spend time together as a family, refrain from having business talks. Focus on loving and enjoying each other's company.
This may not always be the easiest. Like I said earlier, establish a clear communication pattern. Let everyone know what to expect from each other and be intentional about it.
- Proper Division Of Roles And Responsibilities: Some family members may be exceptionally great in certain things. Because it's family, they may tend to do too much of the work alone while others don't. When this happens once or twice it might be fine, but when it's a consistent occurrence this can lead to built up pressure to deliver. Overburdening one person can lead to burnout and prevent the business from growing.
Make sure to divide roles appropriately. That way, everyone can contribute in different ways but equally.
- Make Decisions Together: Decisions should be made together with everyone's opinion being taken into consideration. Avoid favoritism, as this can turn out to hurt everyone in a work environment.
- Document Everything: Make sure to put business relationships with each other in writing. This includes expectations on investments, profits, compensation and ownership shares.
This must be done to avoid any miscommunication and conflict that could arise in the absence of documented expectation. Everyone must know their place, what they bring to the table and what they take away. Get it in writing.
Seek A Fresh Perspective: While you may have a lot of family members well versed in business, always seek out a fresh perspective on how things work elsewhere. As business owners, we tend to miss certain things that can hinder our growth, which is why it's always important to seek outside perspective for effective business growth.
Are you looking to start up a successful family business? Let us know what you are currently struggling with and we would be happy to answer all your questions!
Go ahead and pin this post now so you can easily refer back to it!