There are many positive aspects of running a family business. However, managing a family business can be both tricky and exciting as you have to be vigilant about setting up the boundaries, maintaining the space, and communicating properly.
As many as two-thirds of the businesses worldwide account for family businesses. Family businesses tend to be successful and contribute a significant part to our economy. Meanwhile, only 30% of the family businesses are shifted down to the second generation, 12% to the third generation, and only 3% of the businesses are left for the fourth generation.
There are many positive elements of the family business, such as employing your family members, getting trustworthy partners, and having a business that you can pass down to the next generations. But if you fail to manage a family business, it can cause you serious troubles, such as becoming a source of conflict. These are some of the most important factors that contribute to running a successful family business.
Communication Communication is a crucial factor when it comes to managing a family business. You may believe that your family members know you well enough that you don't need to explain your plans or the nature of a particular task to them. It is a wrong assumption. In a family business, you need to be very open and transparent about everything. When you notice a problem, address it right away. If you feel that things are getting complicated, consult an expert to resolve the problems.
Set Boundaries When doing business with family, people often discuss your business in family gatherings. Many would come forward with unsolicited pieces of advice, which may annoy you and your partners. That is why setting the boundaries is necessary to run a family business smoothly. Keep your business discussion limited to work and your personal discussions at home. Try to maintain a balance in professional and personal lives.
Governance While many family members may have expertise in a similar domain, it is necessary to divide their roles and responsibilities to avoid conflicts. To maintain your business's equilibrium and keep a check and balance on your employees-cum-family members, you may need the involvement of someone from outside the family who could supervise and direct the team while being unbiased. An outsider's involvement is employed by most of the leading family businesses to maintain a professional environment.
Conclusion
Training people for more than 28 years now, I have concluded that the pettiest things can cause serious problems while running a family business. A family business could either be a blessing or a curse. It depends on the way you manage it. It is challenging to manage your family members professionally. However, family business edges over other businesses because it can create wealth opportunities and a legacy for future generations.
If you need consultations and coaching for your family business, feel free to contact me.
FOCUSED KEYWORD: Family business KEYWORDS: Family members, business, family
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