Ensure the success of your family business by following these simple but useful tips.
Family-owned and operated businesses are extremely popular in the US. In fact, family businesses make up 90% of all business enterprises in North America. It also accounts for about 62% of the total employment in the country.
However, it is sad to note that about 70% of these businesses do not make it past through the first generation. Only a handful (approximately 12% and 3%) make it past through the 3rd and 4th generation, respectively. Is there something that can be done about it? Is there a way to make a family business successful and increase its chances of getting way past the first generation?
Thankfully, there is. In fact, there are several ways to ensure the success of a family-owned and operated business. Here are some of them.
Tips to Ensure the Success of Your Family Business
Be fair. Always be fair and treat each person with respect. Recognize the fact that everyone has his or her own strengths and talents. Avoid favoritism at all cost and make sure that the same standards apply to everyone in the company – whether they are family or non-family members.
Allow each partner to be an expert in his or her own department. Divide roles and responsibilities among family members and let everyone bring their own area of expertise to avoid arguments when problems arise or when a crucial decision needs to be made.
Communicate. Schedule regular meetings to avoid any confusion, resolve disputes and monitor the progress of the business.
Set clear boundaries. Mixing business and family life is never a good idea. Don't talk shop outside of the office and don't let family relationships get in the way of business decisions. Establish a clear chain of command and make sure everyone knows their individual roles and responsibilities to avoid any problems down the line.
Don't provide sympathy jobs. Don't hire family members who do not have any aptitude or usable talent to bring to the business. If your children are thinking about joining you in the business, let them get a taste of how the business world operates outside of a family setting by allowing them to work elsewhere first.