How can you ensure that your family business succeeds?

In a study conducted by KPMG in 2013, they found that family business has created over five million jobs in Europe, which equates to 40-50% of all employment.

family businessThis statistic is phenomenal and highlights just how important running a successful family business can be. However, no business shot to success overnight; hard work, dedication and effective teamwork are all responsible for the successes of these companies, as well as the most important factor of all: they learnt how to work effectively as a ‘business family’.

Work together, succeed together

One of the best ways to ensure that your family business succeeds is by working as a secure family network. Families are at a great advantage when it comes to running a business; relationships have already been established, boundaries are generally well known and you tend to understand the way each family member works. A recent article on teamwork within business stated that “one third of all companies in the S&P 500 index are family-controlled, and many are outperforming their competitors”, attributing their success to a company culture built on trust and unity. As a family business, you are highly likely to have these attributes ingrained within your behaviour towards other family members already, so capitalise on this, and build a successful business utilising your family connection.

Set boundaries between work and home life

When running a family business, it can be extremely challenging to keep work and home life separate. Issues at the office can so easily bleed into your work life, creating unnecessary stresses. Before you become too deeply involved in your family business, set clear boundaries and ensure that each family member understands the time that constitutes as working hours and the time that should be dedicated to family issues alone. You will undoubtedly breach these boundaries at one time or another, but if you set clear aims from the start, you will be able to aspire to that perfect work-life balance.

Ensure you’re all on the same page when you start the business

If you’re preparing to start a family business from scratch, it is important to ensure that you’re all on the same page. A five-year plan is not necessarily a prerequisite to running a successful family business, but when it comes to setting up your business, you should all be on the same page with regard to aims and company ethos.

If one member of the family is working to one set of aims and another is working to on entirely different set of aims, the Third World War will undoubtedly ensue. Set out a clear business strategy from the beginning that you can build upon and that can be developed as you and your family business grow.

Never rely on verbal agreements — Make all deals in writing

When it comes to deciding who will bring dessert at Easter, or who will be responsible for supplying the turkey at Christmas, a verbal agreement is enough to seal the deal and allocate responsibility. However, when it comes to business, a verbal agreement is not enough.

Whilst you may be working with your family members, you should still ensure that all major decisions regarding the company are agreed in writing. This will ensure that any questions or concerns that are raised later on are dealt with via the presence of a secure business contract, written and signed by all involved. This will ensure that if/when a decision is challenged, all family members, and more importantly, all business partners can share the responsibility and find a solution together as a team.

Keep criticisms professional

When disagreements occur, it can be easy to fight the battle using family-related ammunition. “That sale fell through, just like when we were 5 years old and you couldn’t sell lemonade to that nice man down the road” is not a productive statement. If and when issues occur, try not to make it personal. Keep your feedback professional and try to ensure that your comments are professional and productive.

If your family business is Already established, ensure it continues to move forward

If your family business has already been running for a number of years and you are inheriting the company, it is vital that you ensure it continues to move forward. Whilst generations before you might have built a business that thrived in their era, it is crucial that the business develops, addressing the changes in technology and working with the modernisation of the business world. Older generations might feel slightly apprehensive about this change, but it is a necessary development and it must be attended to before your business falls out of the race completely. If you’re experiencing a large amount of resistance early on, start slow and introduce small changes first, gradually building up to larger, more significant developments.

Jo Cowan and Claire Chapman have been running their family business, Belle Bridal, for the past six years. Belle Bridal was started in 2009 and has been a family-run business from the very beginning.