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5 tips on how to run a family business

How to operate a successful family business and maintain good personal relationships.

How to Operate a Family Run Business article image

Like any business structure is critical for a successful family-run business where the lines between professional and personal can become blurred particularly in the start-up phase where more unpaid hours are worked. When the cracks begin to appear, whether it’s a few months or years later, the upset family member may well hark back to the unpaid time they spent on the business and how unfair it was particularly even though nothing was mentioned at the time.

In 1994 when I established my business Optimum Operating Procedures and Services (OOPS) it was purely me, and within a short space of time began hiring staff, however, it wasn’t before long that the family became involved.

Some people prefer to operate a family-run business as they believe there is more commitment and trust between them and, in some cases, the business has been handed down through generations.

No matter the reason for operating a family business you need to clearly define the following so that there are no blurred lines and you can all enjoy still gathering as a family.

5 crucial tips for running a successful family business

  1. Job roles: clearly defined for each individual
  2. Chain of command: who is answerable to whom and who makes the final decision and signs the cheques
  3. Agreed standards: operations and service
  4. Systems and procedures: that everyone understands
  5. Agreed action plan: responsibility and accountability

Don’t assume your family are committed

A few years after establishing my first company I purchased an additional business―a café/laundry―no prior experience, and presumed that I could run both with the help of my family.

At first it seemed exciting until reality hit which meant my day consisted of picking up overalls to wash at 6am and opening the shop for brekkies until the staff arrived. I’d then change into corporate wear for meetings and then back to the shop to run evening deliveries. The next day the cycle would begin again. Within a few weeks of opening my husband, son and eldest daughter downed tools and although I employed staff the best employee was my 6-year-old daughter who’d fold washers and hand towels for the payment of a Paddle Pop. Unfortunately I’d presumed the family would want to join me on this venture but with no structure I sold the business within 18 months. Fortunately OOPS had continued to grow. Others aren’t so lucky.

The family has to buy in

You must get the family to agree upon the amount of commitment from each of them. You cannot run a successful family business on assumptions.

Two decades on and with a team of 60+ employees, my family have grown up with the business and now my eldest daughter works fulltime with a defined role and responsibilities and she’s part of the decision-making process for short- and long-term goals. The other family members continue to undertake assignments on their terms, however, will help out if it is necessary―if they want to.

Outside help

Many businesses have a business coach or advisor and in the case of a family business having someone who is not related by blood who brings a strong skill set to the business and is not swayed by personal conflicts when decisions need to be made. This is definitely worth considering if you want longevity in your business.

We’re all aware of great businesses that have disappeared due to family conflicts and disputes, however, there are many successful family-run businesses that have successfully navigated the corporate world and continue to grow.

Structure equals success.

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