Family businesses are one of the most common business ownership models, however very few of them survive beyond the first generation. Many family businesses are like the unnoticed gem amongst a buried treasure. They are never fully appreciated.
According to the Institute for Family Business (IFB), two-thirds of the UK private sector is made up of family businesses. That’s over three million family-owned companies in the UK. These include your local corner shops to the renowned Dyson, JCB and even Specsavers.
Most of these businesses are so successful because the families who own them have a strong vision for their company, they put in long hours and are hard-working but most importantly they are extremely trusted by their customers.
However family businesses do come with their challenges. These challenges often surround succession planning and leadership.
According to Family Firm Institute, “70% of family businesses will not survive into the second generation and 90% will not make it to the third.”
Although, some family-owned companies do surpass this. So what is their secrets of success?
Secret Number 1: Treat your business like a business.
Don’t get carried away because you are working with your family, you have to remember that it is still a business at the end of the day. Try to remain professional at all times. Deal with personal issues in your personal time and business issues during business hours.
Secret Number 2: Put business relationships in writing.
It’s easy to enter a business agreement with your family not knowing exactly what you will get out of it or where you stand. Therefore make sure you put ALL agreements down in writing. This will allow you to know your position in the business and what you’re entitled too. This will also save you from any miscommunication.
Secret Number 3: Have clear and regular communication.
Communication is key to any successful business. If disputes arise address them immediately, this will solve any underlying issues.
Secret Number 4: Divide roles and responsibilities to avoid conflict.
Although some people may be more qualified than others try to share jobs role. Make sure everyone knows their place in the business and what they bring to it. Additionally make sure all family members are involved in making decisions.
Secret Number 5: Treat family members like you would treat any other employee.
Just because you are family it doesn’t mean you can treat each other how you want. It is not professional to be either more lenient or strict on your family just because they are. Everyone deserves the same level of respect.
Secret Number 6: Seek outside advice regularly.
Sometimes you need to step out of the box to see the bigger picture. Advice from an unbiased outsider is some of the best you will receive. Make use of this and look at situations from a different perspective.
Secret Number 7: And finally, recognise the advantage of family ownership and play to this.
Remember your family business is ace, you get to work with your family and if you actually them, what can be better. You’ve known then most of your life, you know each other more than anyone else, and you probably share a few common interests.