My own training business used to be a mother and daughter affair. You might think, ahh, isn’t it great that a young aspiring business woman, graduate of a top business school, would even consider working with her dinosaur mother? It was difficult, emotional, very rocky at times and not to be recommended unless some golden rules are followed. I wish I’d known about these before we embarked on our intergenerational enterprise.
According to the Institute for Family Business, the key consideration is to avoid conflict between business objectives and rules and family priorities and emotions. Family businesses differ from non family- enterprises in so much as family matters can get dragged into the boardroom where they have no place and personality clashes often have deeper roots.
So, what needs to be considered when running or setting up a business with family members?
Tip One:- Draw up clearly defined roles and responsibilities and don’t cross over ( unless standing in for sickness). Depending on the kind of business you may need to have a legal contract for terms and conditions. If necessary, consult an employment lawyer who specializes in family businesses for advice if needed.
Tip Two:- Family members are employees of the business so standards of behaviour and performance should be the same as in a non- family business. Put boundaries in place eg family matters should not be discussed during the working day and arguments should be left at home.
Tip Three:- Many family businesses are rooted in tradition and values unique to them. Older generations may want to stick to the old ways therefore coming into conflict with the younger members. Technology and social media is an obvious example. I worked with my Grandfather in his wallpaper shops from the age of ten years old ( using the old currency). When decimal currency was introduced in 1971 he was quick to learn it whereas others of his age were not.
Tip Four:- Family communication is one of the biggest threats to the smooth running of the business. In cases of serious breakdowns in communication and resulting conflict, external consultants are sometimes brought in. If people stick to facts and keep emotions out of the workplace, this shouldn’t be necessary.
Other keys to a successful family business include mutual respect, the presence of good role models within the family, the ability to not take business issues personally, and the patience and ability to listen to others.
Tip Five Keep business issues separate from family and home life. If you are running a business from home, maintain a separate office space, get away with the family for quality time and find time to be with friends. This is the area where I made a number of mistakes and it created a lot of tension.
If you are starting up a new business with family, make sure you get on with them before you start. Do a skills list to see how you compliment each other. Discuss potential clashes before you sign the paperwork. Consider how the money is to be paid out/divided/invested.
Money is the source of much conflict, most of it emotional. If your family business loses sight of its vision and doesn’t have a succession plan then the boardroom can sometimes end up like the lawyer’s office during the reading of a will ( do people still do that?) No one speaking to each other for years!