Keys For Starting A Family Business
Family business is a common form of enterprise. Such, it has as many benefits and rewarding points, but it is also a path paved with daily challenges. Encouraging your kids to take part in family enterprise and avoid being oppressive or managing different skill sets of relatives and employing them in the best possible way requires a special set of skills. Unless all aspects of business are worked out well from the very start, working together can affect family relations. Getting together at family gatherings and sharing a workplace are two completely different things.
Start from Early Age
According to Adam Toren, a co-author of Kidpreneurs, kids need to learn critical thinking skills, to take responsibility for their actions and decisions. These skills are of paramount importance in every business. Besides, another trait of successful entrepreneurs is determination. Every business, and especially a family enterprise is full of challenges, and they require resolute management and employees, who will have the skill and tenacity to push forward in the time of crisis.
Assess the Skills and Experience
If you are about to start a family business, the first thing you need to do is to assess the family members’ skills. Estimate the strengths and weaknesses of everyone and try to recognize talents so you can decide the roles. There will be inevitable experience gaps that should be filled by skilled employees outside the family. Online business tools like Xero bookkeeping should be used to complement learning workforce. Also, determine of the personalities of potential employees match. For a family enterprise a harmonious work atmosphere is a must, so make sure there are no interpersonal or cross-generational conflicts.
Outline the Risks and Sacrifices
Every family member must understand the risk of such an enterprise. Make clear to everybody what is at stake, or what are the difficulties and sacrifices that will be necessary over time. The company will not make big profit right after the start, so there may be a reduction in lifestyle, and ultimately there is always a risk of losing the investment completely. The start is always demanding, and they may not like the long working hours needed in the beginning.
Estimate the Motivation
It’s important that every family member who will be involved is doing so of their free will and true belief in success and not because of reluctance or a sense of obligation. A startup business is based on every member’s absolute commitment to the goals. The company should be built on sound foundations from a legal point of view. Any issues like ownership shares, and procedures for liquidating shares in the event a family member leaves should be planned in advance, so that there would be no bitter aftertaste when it’s too late.
Make a Clear Structure
An organizational structure should be set up from the very beginning. Every family member should understand their responsibility and their decision making level. If everyone adheres to their roles without interfering with other members’ roles eventual conflicts can be reduced. Most importantly, you need to clearly separate the family from work. Employees outside the family should be treated as fairly as family members in order to avoid hard feelings and discontent.