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Set your family business up for success

You love your family. You want them to be successful. You want to be successful, too. When you work with family, you have both advantages and disadvantages. You already know one another, and probably know how to communicate. On the other hand, it can be difficult to criticize family. It can also be challenging to have a leader amongst relatives. The line between professional and personal can be hard to decipher.

With that being said, it is still possible for a family to start and run a business together. You will want to clearly plan all aspects of your business. You and your family will need to work together. Start by discussing the goals of the business so that you are all on the same page. From there, you can work on balancing your relationships as business partners, as well as family members, to be successful in both aspects.

These are some steps your family can take as you plan your business:

  • Establish communication methods. You will want to create a boundary between business time and family time. Decide how you and your family members will talk about the business and when. It would be helpful to establish meetings, and have meeting minutes drafted so that the discussions are documented.
  • Clearly establish responsibilities, roles and titles. You and your family members each bring different qualifications and skills to the business. You should talk about these aspects and work to discuss who will be responsible for what, and why. If your business will employ workers outside the family, make sure there is a clear line of management. Draft job descriptions for all family members so that there are no questions regarding responsibility. It is helpful to have this in writing.
  • Promote education. You will have identified the strengths of all family members, but it is important to continue learning. Family businesses can benefit from fresh perspectives. If younger generations wish to enter the business, you will want to treat them like a typical employee. See what strengths they bring and experience they have. It could be beneficial for family members to continue learning about the market and how other businesses are successfully strategizing.
  • Create a succession and estate plan. You will want to create a succession plan and an estate plan to handle future generations. A formal succession plan may include requirements for younger family members to gain experience outside the business before being signed on. An estate plan can help the family avoid disputes in the event that someone passes on.

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