Advivo Business Advisors and Accountants Partner, Chris Morris, shares his six key tips for success when it comes to running a family business.
Family dynamics can be interesting at the best of times, and we all know how challenging being in business can be. Now mix the two together, add a dash of cash flow stress that can not only impact the business, but also those in it, and you’re left with the perfect recipe for a hot disaster, all packaged up into a nice pressure cooker that is a family business, just waiting to explode!
Running or working in a family business can be tough. I did it for over 10 years myself, and below are my top 5 tips for, not only managing that pressure cooker situation but also ensuring it’s removed so you can get on with the things you enjoy, which hopefully include both your family and your business.
1. Understand the Plan – Take a step back and assess
If you’re already feeling the pressures that come with running a family business, it’s not too late to tweak things for the best. All you need do is take a deep breath, step back, and ask yourself why (after all, even pressure cookers need checking).
Business owners can easily fall into the trap of being too busy to get off the hamster wheel and ask the tough questions to really understand why the situation is as it is, and to identify what the plan is for both the business and the family. Of course, things don’t always go to plan, but without one, you could be missing opportunities for both.
This is the first tip because taking the time to understand where things are (your ‘Now’), and then comparing that to your plan (your ‘Where’) are the first steps to ultimately identifying what can be done (your ‘How’) to ensure that neither your business nor your family becomes a statistic. We have a great guide that can help you with this, check it out here.
2. Communication is Key – Keep it consistent.
Good communication is imperative in so many aspects of life and when it comes to a family business, good communication is perhaps the single most important factor for ensuring your business and family can not only function together in harmony but can grow and help you achieve your goals in both areas.
It’s easy to fall into the trap of expecting family members to understand what you’re thinking because they should know you better than most. It’s important, however, to ensure that there is a clear understanding of expectations and responsibilities between family members, just as there should be with other team members.
3. Document Roles and Responsibilities
Employees should be treated the same regardless of whether they are family or not. Favouritism has no place in the workplace and if you have a family member working in your business, they should be held to the same level of accountability as non-family members.
Ensure Roles and Responsibilities are clearly understood and documented. This helps provide accountability around expectations.
All roles within the business should have performance results standards appropriately set, which clearly articulate the expected outcomes required. This way, regardless of whether it is a family member or not, the expectations of whoever is performing that role will be the same.
4. Understand who’s who in the zoo.
An understanding of the individuals involved, including yourself, can help with a deeper understanding of what roles those individuals undertake in different environments. Also, understand that the business and family environments may not have the same hierarchy so it’s important to know which hierarchy is applicable at any given time. That’s right, there are two sets of rules for you depending on which hat you’re wearing at which time.
5. One Hat for Work, One Hat for Family – never the two shall meet… or should they?
Agree when and where it’s appropriate to discuss family matters and business matters. Of course, there may be some overlap. After all, you can’t just turn off being a parent, and it’s not always appropriate to leave work at work, but it is important to understand and set boundaries to be able to maintain a level of separation where appropriate. This practice needs to be understood and embraced by all family members.
6. Regular Monitoring – You’ve got this!
You’re in business for a reason, and if you’re aware of and applying the above then you’re almost there! The final part of the puzzle is of course all things business. Don’t forget the business! After all, that’s why you’re here in the first place. If something’s not working you just need to identify whether it’s business, family, or both. Nothing is unfixable, some things can be just trickier than others, and anything can be tweaked.
I’ll say it again, running or working in a family business can be tough, but if you get it right it can also be extremely rewarding on both fronts! We love working with family businesses because we’re great at all things business, and when it comes to family, an outsider’s perspective who’s worked with all sorts of different families can often be the difference between a family business that just ticks along, versus a family business that just hums! If this article resonates with you and if you’re ready to take that next step for your business, we’d love to chat!
