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Top 10 Tips For Running A Family Business

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Business

Top 10 Tips For Running A Family Business

Top 10 Tips for Running a Family Business

Working with family members has its benefits but you will also inevitably have to deal with tricky and challenging situations that can go out of hand. At its best, family businesses can bring out the best in the family members but at its worst, it can destroy family relationships. Through it all though, it is important to realize that business is business and there should be a line between personal and professional life. Implementing this concept though is not as simple as it sounds because there are many unique situations in the everyday operation of the business that sometimes calls for stepping between the lines of business and family in order to accomplish important tasks.

Another thing that can either be positive or negative aspect in a family business is that there is already an existing personal relationship among the members so each probably knows the strong and weak points of each other. This also means that they know the “cold” and “hot” points of each member so it is easy to manipulate each other if they are inclined to do it. For example, if one member (lets name him A), wants to close a deal with one client while the other family member in the organization (lets call him B) objects, A would know the motivations of B so it would be easy for him to convince this family member. If the motivation of B is to increase profits then A would likely accentuate the monetary benefits they can get from this deal.

As you can see, there are definitely a lot of issues that needs to be resolved if one wants to be involved in a family business. It is really no wonder that a lot of second or third generation owners do not want to get involved in the business and instead, they look for employment elsewhere. Because of all these factors, businessmen who run a family corporation find it hard to be rational and logical when it comes to dealing with their relatives. But if you want your business enterprise to succeed, it is important to confront these issues head-on. So how exactly do you do that? Well, here are some practical tips:

1. You need to talk to the family members who you think is affecting the way you work. These people can either be people that you are very close to or people who you dislike. Everyone needs to acknowledge that improvements need to be made to enable the business to reach its potential.

2. Talk about the impact of your relationships on the productivity of the company. There are many companies whose employees are affected by their bosses’ behaviors. The family members need to discuss this as well so they would know how to behave when they are around employees. Discussing this issue will also enable the business owners to understand how their behaviors affect the productivity of the company as a whole.

3. Get an outsider. You need to agree that it is important to get an outside point of view because everyone in the enterprise has its own interest in mind when it comes to the business operations. You can hire an experienced human resource personnel who has experience in resolving conflicting family interests.

4. It is also important for all family members to realize that these measures are essential for the continual success of the business. If even one of them doubts its importance, then there is the possibility of having to deal with confrontations later on.

5. Make the workplace more professional. Now that you have all agreed that changes in the organization are important, it is time to implement these changes. Everyone needs to agree not to let personal feelings and motives interfere with the interest of the company. And likewise, having a proper organizational structure is a necessity.
6. Set clear goals. The business enterprise also needs to have a clear set of goals wherein the direction where the company is going to be is outlined.

7. Define the roles of each member. This is a critical step in making the business enterprise be efficient and productive. Responsibilities and tasks should be given to each family member so that their roles in the organization will be clearly defined. This step will also ensure that family members will not go out of bounds in interfering with different aspects of running the business. In addition, there is an added benefit to this because employees will enjoy a more structured organization wherein they know who they should report to in case of problems.

8. Clarify the process in the workplace. The decision-making process is another critical factor in business operations. Everyone needs to know how important decisions will be made. It is important to determine if this will be made through a centralized management or if several key people in middle management will be given the opportunity to make decisions on their own based on what they feel is right.

9. Build trust. This is usually taken for granted in a family organization. After all, they are family, right? Wrong. Building trust in a family organization takes as much effort as building trust in other organizations if not more. This is because family members in the organization know more about each other than what is comfortable in the workplace. For instance, if someone was a great liar when he was younger, then chances are, this impression will remain with him even in the workplace even if he has long since become truthful. For this reason, it is important to show your family members that you are reliable, trustworthy, and hard-working.

10. Build interpersonal relationships. This is somehow related to number nine but in a family enterprise, it is important to go further. You also need to build a good relationship with your family, especially your relatives, so that a very fulfilling working relationship can be established.

Despite these tips, it is undeniable that you will encounter one or more problems in the course of the business operation. It is important to remember though that all businesses have these problems. Do not take minor disagreements personally because it will not only hinder your family business from progressing further, it will also damage your existing personal relationship.

The key to any successful family organization is learning where to draw the line between business and family and striking a balance that will enable every person involved to get the best of both worlds, that is, having a good family relationship while having a profitable and flourishing business organization with these same members at the same time. Now that is what people call a win-win situation.

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