We see family businesses fail miserably, and we see them achieve extreme success. Doing business with family members might be a good decision or a bad one; each family is different. If you’re considering doing business with your family members, you certainly want to be on the winning side. Family businesses that succeed do so because they remember these six important tips. Remember them, too, and you’ll have a much better chance.
Don’t Expect Them to Change
You know your family members extremely well, and you know all of the good and not-so-good aspects of their personalities. And you must realize that their personalities won’t change. While it won’t always be difficult to separate the business from the personal, don’t expect your stubborn uncle to agree with you easily or your timid sister to stand up to unruly customers. Use your close personal knowledge to your advantage, and play to each family members’ strengths rather than weaknesses.
Remember that You’re Still Family
No matter what happens with your business, you will always remain a family. Your family should be most important. When things in the business get difficult, try your best not to let it ruin the family holiday parties or vacations. Remember your commitment to and love for your family that should always persist despite any business difficulties.
Don’t Be Afraid to Say No
When you respect your family members and love them so much, it can be hard to vocalize disagreement or dissatisfaction. You can’t be afraid to stand up for yourself or to say no, no matter how much it may hurt someone’s feelings. You have to put the success of the business above family emotions.
Put Employment Agreements in Writing
Don’t just assume that your family members understand their roles in your business or trust them to follow through with their responsibilities. If you have family members as employees, put the employment agreement in writing just as you would for anyone else. This will help make expectations clear and help you avoid any conflicts over related matters.
Put a Dissolution Plan in Writing
You should discuss with your family what will happen to the business if someone dies or if it fails. It’s never fun to plan for the worst, but it’s necessary. There needs to be a clear plan about the future, and you need to prepare for any difficult obstacles. It’s better to get an agreement in writing now than argue over decisions at the time they need to be made.
Put Everything in Writing
You have your employment agreements in writing, and you’ve written down a dissolution plan. While you’re at it, put absolutely everything else in writing, too. With family, it’s easy to be very trusting and assume that everything is understood. But that’s how family businesses get into trouble. Document loan amounts, business decisions, salaries, and anything else that could ever be disputed because it’s only your word against theirs. No matter how much you trust your family, document everything just in case.
Hunter Leigh is a business major at the University of Texas who loves to spend his free time writing for blogs. He never writes without the help of a grammar checker to proof his work as he struggles to make his text abide by all the grammar rules without its aid.