Managing a family business can be more complicated than handling a small business of your own.
When family members have a major proportion in business there are conflicts in ideas, thoughts, and decisions. Everybody is trying to put their hold on above. Arguments in daily operations, differences in opinions and the high turnover rate can put the business in a dangerous situation where it might collapse and fall.
Accept the notion that it is okay to have taboos! Conflictions happen that boards hesitate to tackle, it’s a negative sign to the business growth. One thing that is seen that avoidance always doesn’t work, sometimes you also need to speak up for things that many people will say you shouldn’t have, eventually you will see the good results of speaking the right thing at the right time to the right person.
Learning to move through uncomfortable situations constructively is one of the biggest challenges that boards of family businesses face.
While family businesses may be a major economic driver, only a mere 30% endure into a second generation, 12% last into a third generation, and just 3% make it to the fourth generation
A family business can either prove to be a blessing or a curse, depending on how you manage it.
Bring up realistic ideas with their outcomes. Do not come up with just something that may look unprofessional.
What’s the secret behind it? We have the 10 best strategies to manage your family business to help you in dealing with everyday family business challenges.
1. Present Your Thoughts with its Pros and Cons
State the advantages and disadvantages of it and also state how beneficial it is to the business and if you face any calamity, how your company is going to face it. Proving your points will help you make your position stronger in the company and your business will be accomplished in a good direction.
You can deliver your complete message with carefully crafted words. This is highly important in situations when what you say will be part of the historical record, or when there is a great need to be precise.
2. Consider Future Technologies
Consider the future technologies; take the decisions that help your company to become more advanced.
The competitors will always be trying to hit you and get the first position in the market. Keep yourself in touch with the new advancements and help your company grow.
Because modern problems need modern solutions. If you neglect the technologies and rely on old things, you may lose customer’s interest and your company will be facing loss. This will enable faster change and progress, eventually, it will become exponential.
You will be able to streamline the repetitive processes with automation and you will have overhead cost savings with remote work. Using technologies in the workplace will help in higher employee productivity and satisfaction.
3. Do Everything in Writing
In case, your family members decide to take shares out from the business to get separated, keep the written documents of investments, shares, expenses, and what will be given to each member in case of dissolving of a company or retirement of any partner.
So no one claims for anything any later. It is also necessary for government records and cooperates you in business hectic. This also benefits you in future coordination with any other company for legal documentations. To avoid hard feelings or miscommunication, put something in writing that defines compensation, ownership shares, duties, and other matters.
4. Build Trust
Trust in yourself and in the people you are working with is very important. You work with them. You all are a team. If anyone does cheating the whole project will get disrupted. It is better to choose the employees wisely so you do not have to suffer lately.
Above all, make yourself worthy to be trusted. You must play your part very well. Trust each other, make bonds strong and create a lively environment in the working place. Nobody gets inferior to another and everyone will feel free to share their ideas.
You can build a strong trusted bond by following these effective tips:
- Be clear and open about the status of different family members within the business.
- Maintain a shared sense of certainty (and uncertainty). Certainty is about how well we are able to predict the future.
- Ensure a consistent sense of fairness. This is a perception of fair exchanges between family members.
- Be comfortable with differences of opinion and disagreement.
- Be clear about who has control and over what. Does each family member have sufficient autonomy? Do they believe that? How is autonomy balanced against risk management?
5. Set Boundaries
Family members need to see that they do not open up their talk show in the office 24/7.
There must be clear boundaries drawn between their life talks and business work. This should be cleared to every person coming to the office for work. Neither any family member nor any employee should discuss family matters at work.
This creates disturbance and work, and anyone who is trying to work also gets involved in chit chats. In conclusion, there are some ways and some limits to everything. Respect your family matters and do not allow anyone to talk about your family. Otherwise, it will eventually produce a volatile brew.
6. Treat All the Members Fairly
Suppose you have no good relationships with a few of your family members, though you all work in the same office with or without a difference of few shares, and probably your behavior with them won’t be very good.
Promotions will be given on the qualifications, listen to everyone and then make the decision not to agree with one and ignore the rest. It is business, not your evening tea party where you can be bitter to some and fair to others. Treat everybody fairly and equally, no matter what relations you have at home.
7. Rules are for Everyone
Everybody should be managing things and putting their part equally in work and business meetings. Everyone must follow the rules. If an employee is charged for coming late to the office, then if a CEO comes late he/she should be charged the same.
Countless small companies would never have survived without the hard work and energy of dedicated family members. A qualified member is a great asset to your business but still avoids favoritism. Criticism and praise should be evenhanded between family and non-family employees. Don’t set standards higher or lower for family members than for others.
8. Seek for Third Party Advice
When it’s all family members, there are conflicts in ideas, and one not agreeing to another’s point may create rivalries.
To sort it out in a better way, seek someone you know very well, who can keep secrecy and have knowledge about the topic. That person will guide better. Acknowledge that guy with both the ideas and the situation, and ask him to choose what’s better for his business.
If you don’t find any trustworthy visits a business consultant and take his guidance. Paying a few dollars to the consultant is better than creating boundaries with your family member or facing a great loss in your business.
9. Divide the Roles and Responsibilities
Whoever works in the company, must divide some responsibilities of work.
While various family members may be qualified for similar tasks, duties should be divided up to avoid conflicts. Big decisions should be taken after consulting, but a debate over each little move will bring the family business down.
Assigning specific duties to employees helps them perform their tasks efficiently. Eliminating redundancy in the duties each person performs makes more efficient use of time and money.
10. Be Logical, Not Emotional
Your points will be listened to and also brought into account only if you come up with logic.
Getting emotional over small things will declare you childish behavior or unfit for family meetings. If you have something to put forward, also discuss why you think your idea is viable and how it could help a business grow.
Logical thinking skills include being able to self-analyze and actively use critical thinking and logic, rather than just emotion and feeling, to come up with a solution that is not only feasible but works well for you and the situation.
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