Managing a Family Business
More than 60% of businesses contributing to the US GDP are family-owned. Over the years, families have been coming together to invest in companies to create business empires for generations to come. As such, family-owned business entities are the largest employers across all sectors in the US. Managing family businesses is a challenge because of divergent interests and views from family members with such immense reach. As a result, there are specific tips that one needs to follow to manage family businesses successfully. In this article, we will focus on a few tips that will enable you to run successful family-owned businesses.
Establish systematic communication processes with the family members. This is essential because constant communication will ease the decision-making process. Through enhanced communication, there is little chance for misunderstanding between family members. Communication will help ease suspicion about the company’s running as every family member will be involved in decision-making.
Set administrative boundaries
It is essential to know when to involve family members and avoid them. This is essential when you need the services of professional personnel to run specific dockets. Alexander Djerassi, a successful entrepreneur, believes that owning a family business doesn’t mean you are experienced in running the company because you might need to get someone outside the family circle to run the company. The employee will require all the freedom and time to execute his mandate. Family members should be given access to a particular point and made to understand their boundaries in the organization.
Have tenets of good governance
Family businesses require good governance and arbitration all the time. Frequent wrangles in business management are the recipe for the company’s collapse and should be avoided at all costs. A successful family business needs to be run by family members with good leadership and arbitration backgrounds. Good governance requires recruiting managers outside the family circles to maximize service delivery and minimize biases.
Treat employees well
Any successful family-owned business entity requires that you treat employees with respect and decorum when treated well and feel like family leads to increased work output—as such, owning a family business needs an environment where family members reduce their dominance and co-exist with fellow workers by regarding them as family. They will consider the company as their second home and work towards making it profitable regardless of the prevailing conditions.
Set the right expectations
Setting the right expectations for the company is essential for the long term. Through a clear company vision and mission, employees and employers understand their mandate well. Alexander Djerassi is an established entrepreneur and foreign policy expert. He is very passionate about advising families to navigate the international environment in expanding family-owned businesses. Djerassi adds that setting the right expectations will ensure you succeed in increasing your family business to new territories. Having a strategic plan is another sure way of making plans for the future growth of your company. Having the right expectations will give the employees the scorecard to follow and understand the repercussions of failing to deliver on their mandates.