It’s only business, nothing personal! The disadvantages of going into a family business vary from family to family. If you’re going into business with family, there are some rules that all members must follow. The idea, of course, is that you all are in it for the money. However, money and family only mix if you respect the rules. Read my online Online Business story on how I learned the hard way.
Do you ever wonder what it would be like to work with business owners you love? Is it possible to join forces but remain family? Can you mix business with pleasure? What are some of the disadvantages in running a family business? On the other hand, starting a family business is an exciting and challenging venture.
Family businesses have been around for hundreds of years and are still going strong. After all, owning a business together means more resources, relationships, and support. Not only do family members get to spend time together while doing something valuable and profitable, but they also share the same values and keep important history alive.
While there are many upsides to going into business with your family, some disadvantages and pitfalls must be considered if you want the venture to succeed. In this article, we’ll discuss critical things to remember when entering a family owned business, balancing passion with practicality for success.
Define Roles, Responsibilities Clearly: Family Business: Disadvantages
Business with family members needs clear roles and responsibilities if you don’t have them written down you are starting off with disadvantages already. It allows everyone to understand their tasks and how they contribute to the team’s success. Establishing values at the onset provides a foundation for decision-making and help ensure that everyone is on the same page. Defining each person’s role and objectives with clear work standards also helps ensure everyone knows what is expected of them. This includes clarifying and documenting job descriptions, KPIs (Key Performance Indicators), goals, organizational structure, ownership, profit sharing, and expected schedules.
Establishing clear roles and responsibilities for each team member to distribute workloads evenly is also important. Everyone should respect each other’s opinions and collaborate on decisions to ensure that all voices are heard. By setting clear roles, responsibilities, and expectations from the beginning, teams can avoid misunderstandings or conflicts down the line, which could lead to decreased productivity or morale. With these guidelines, teams can focus on achieving their goals and objectives.
Communicate openly and often: Family Business: Disadvantages
Open communication is an essential part of any successful family business. It should be a two-way street, with each person involved communicating their motives and hopes for the company’s future. This helps ensure everyone is on the same page and working towards a common goal. Open communication also allows for better problem-solving and decision-making, as everyone can voice their opinion and contribute ideas.
Being unclear can be unkind and will put you at a disadvantage, so it’s essential to be open and honest about plans for the future. This will help to build trust between family members, which is necessary for any successful business venture. Additionally, it will help to create a sense of unity among family members as they work together towards a common goal. Open communication should be encouraged to ensure that all family members are informed about decisions and can provide input when necessary.
Everyone must know their place.
Working with family members can be a great way to start a business. Knowing each other’s strengths and weaknesses allows for an efficient division of responsibilities and help navigate difficult situations. Some believe that operating a business alongside people you know best is a huge advantage. However, starting a business with a family member can be risky and affect your relationship. Before partnering up, you must consider how you’ll handle major decisions, ownership, roles, evaluation, risk, and failure. Disagreements between partners can hurt the personal relationship if not handled properly.
Get advice from consultants: Family Business: Disadvantages
Getting outside advice is an essential part of running a successful business. It can help identify blind spots, create goals, and work on relationship issues that may arise in the workplace. In addition, outside advisors can provide valuable insight into the operations of a business and offer suggestions for improvement. They can also guide how to handle difficult situations or decisions that need to be made.
To succeed, it’s essential to keep learning and growing and seek advice from outside sources.
Setting firm boundaries between work and personal time is essential for maintaining a healthy balance.
If the company has family members on staff, their abilities are considered when hiring, and they are held to the same standards as any other worker.
Additionally, make sure to spend quality time together and apart, including creating “me time” if you spend the work week with family members. Taking these steps will ensure that everyone involved in the business remains productive and happy while
Performance reviews for Families can be awkward
It can be challenging when managing a family member in a business setting. This is because there is an inherent conflict between personal and professional relationships. It can be hard to confront someone related to you, especially if they are not meeting expectations. This could lead to tension and awkwardness that could damage the personal relationship, making it harder for both parties to work together professionally.
The challenge of managing family members in a business setting is compounded by the fact that there may be an expectation of preferential treatment due to their familial ties. This can make it even more difficult for managers to hold them accountable for their actions or performance, as they may feel guilty about doing so. Therefore, managers need to set clear boundaries and expectations so that everyone involved understands what is expected of them and how they will be held accountable if those expectations are not met.
Set Expectations
Setting expectations and boundaries early on when considering going into business with family is important. In addition, weighing the pros and cons of the decision is essential to ensure it is well-planned.
It’s essential to prioritize your relationships with those closest to you overwork, as they’ll always be there for you no matter what.
Establishing values at the onset will provide a foundation for decision-making.
My Rules on what it takes to work with family and avoid disadvantages of a family business
- Once you are on the business clock, you are working partners and not family members
- Find good legal Counsel to draw contracts and solidify your business operation plan. Here’s one I found that specializes in family business through a google search; you can start with HodgsonRuss LLP
- Have a business plan and legal agreements that specifies who is doing what in the organization. I often hear stories where things go wrong when there is no documented leadership in the family business. Family members usually believe the oldest is in charge or whoever is the loudest.
- State your operation plan clearly on who is doing what and when.
- Agree on the business goals, so everyone works towards the same purpose.
- Business partners must communicate. Be sure you have weekly and bi-monthly meetings to review all business matters.
- No surprises. This goes back to communications.
- When conflicts arise, there must be a clearly defined plan that everyone will follow to resolve disputes.
- And ensure you have good business lawyers to help guide the plan.
These are just a few items that you’ll need to discuss with your lawyer.
At the end of the day your still family and you want to keep it that way
About the author
My Name is Vito, and I am an IT manager by trade; I was like any other middle-aged male who was out of shape, but I decided to change my life and became a fitness and health enthusiast. You can read MY STORY on how I was fat and unmotivated, turned my life around, and stopped eating ultra-processed foods. All while trying to start an online business.
You can find some interesting articles on my blog related to fitness and other health-related topics.
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