Thinking of starting a family business? By George Yeung

Great! Let’s start a family business.

But, is your family ready for this exciting adventure?

The returns for starting a business and running a successful family business can be very rewarding and strengthening the relationship with one another in the family.

As expected, running a business there will be may decisions to be made from the very beginning, such as purchasing using of company’s fund, making vital decisions and planning the direction for the business. Seeking the agreement from all parties involved can be a real art to get through all the challenges and before relationships turn sour.

Family business comes in different forms and sizes. In this article, I will be concentrating on small to medium family businesses.

Family businesses can be made up of husband and wife as a team or the partnership between family relatives and siblings.

As the time goes on, there are new addition to the family. It is vital to consider whether they will be included in the family business. There are many factors to be considered prior to inviting another person to the family business.

There are a few samples of the important questions to ask yourself:

  • Does the business require any additional human resource, ie. Marketing personnel, accountant or another helping hand, ect?
  • Can the business afford the addition?
  • Can the additions fit into the family business and “add value” to it?
  • Does the new addition want to be a part of the family business?
  • How does the current family members involved feel about having the new addition to the current business operation?

In this article, I will briefly discuss three key areas which add value to a successful and smoother family business operation from my personal experience.

  1. Communications
  2. Goals
  3. Relationship

Communication:

Good communications within the family business will build good relationships and make a very positive, energetic working environment. But, communicating with family members can be a difficult task, especially trying to introduce different ideas to your siblings and another generation. Therefore, it is vital to set aside the personal feelings when communicating with family members regarding the business. At the end of the day, business is business. And, family is the most important part in life to most people.

Goal:

Different pathways and head towards the same direction. Set a clear goal, find your passion, agree on the same pathway and open mind for the adjustment and regrouping.

Operating a successful family business requires dedication from all members involved. It takes tremendous amount of effort to have all the family members align all the expectations and work towards the same goals. Fair to say that most of people would like to see a success in their own business instead of failure. It is how a business gets there required the agreement from all parties which can be challenging as people naturally will have different ideas or see things from different perspectives. It is important to recognise the advantage of family members willing to participate and share their ideas although they may be different. Everyone loves rewards, it gives motivations and satisfactions. However, in a family business, the rewards can sometimes take a little longer than expected. Having a same goal aligned in the family business will not only provide hope and build a strong family relationship but also all family members can have a good idea of what to contribute to the business.

Relationship:

“Protect your family relationship by separating business matters and personal matters. Set a clear role and responsibility with the expectations for individual family member involved. Prior to starting the business, it is important to decide what happen if the business does not work out and have them DOCUMENTED legally.”

Unsuccessful family business could be damaging to the family relationship which might take years to rebuild the relationship and it may not be the same.  It is important to think of the consequences and set up a back-up plan for an unsuccessful business. It is a good practice to have an assigned role and duties for each family member.

Remember, the reason for a successful family business is all started with the family. Trust is the main factor. It is important to develop trust within all family members involved, learn to listen and communicate effectively.  Don’t be afraid to talk about your ideas on how the business can be run. You never know if you never try. Some inputs are always better than no inputs.

It takes time for people to learn to work with family members and develop a professional relationship because we grow up with them. It may not be easy for you to accept ideas from your younger siblings or other family members, vice versa. At the same time, it may be challenging for older generation to understand your perspectives and accept different ideas. As the time goes on, the way to do business and customer needs may be changing so do not be afraid of expressing the ideas to the rest of team members. However, it is vital to communicate effectively to other members the reasons why you think they are good ideas for a better result.

At the end of the day, keeping a business up and running is not an easy task and possibly required 24/7 which leaves you minimal time and space for personal time, let alone it is a family business. Seeking unbiased professional advice to assess the current situation, identify opportunities and improve the business performance can be the first step for many business owners for their transformation and the way to the success with great relief on their shoulders.

Chat with us today on (03) 9018 7388 or send the email to gyeung@bldconsulting.com.au if you would like to explore the opportunity for maximising your business potential.

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