Many businesses in the world today are family-owned. Family members can pull together and start a business that will benefit all of them equally.
“Starting a business with parents, siblings, children, or a spouse can sometimes prove to be more daunting and could present a unique set of challenges over and above the difficulties of a typical startup,” said Issa Asad Florida businessman and entrepreneur. Mr. Asad is the CEO of Q Link Wireless and Quadrant Holdings, located in South Florida. He is also the author of 4 e-commerce and marketing e-books that can be purchased on Amazon.
It is no wonder, therefore, that of every three family-owned businesses, only one survives to the next generation.
But that is not to spell doom for family businesses. In fact, a family business, when operated well, can turn out to be very profitable. But there are a few basics you’ll need to observe to strike the elusive balance between family and business.
Here, Issa Asad Gives the 5 Rules for Starting a Business with Family:
Define boundaries with business partners
When engaged in family business, often the line between family and business will blur. Family members can talk about business throughout. However, you ought to understand that mixing home, personal, and business life is going to be harmful- not just to the business, but to the home environment as well.
Therefore, it is prudent to limit business discussions to the office and try to refrain from talking about the business at home or in circumstances you should ordinarily be at ease.
Begin with clear communication
Differences of opinion are inevitable in any organization- and a family business is no exception. Therefore, you will need to come up with means of resolution of any disputes that may arise. You may also consider having weekly meetings where you can gauge the progress of the business, and where you can iron out any differences if any. After all, communication is important in any set up.
Assign roles to partners early on
Not dividing up roles is a recipe for conflict. Therefore, for peaceful coexistence, you will need to divide up tasks and duties among the family members- to each according to their qualifications. But even after dividing up the roles, it is important that you come together to debate on big decisions affecting the business.
Legalize all business agreements
There is a temptation to run the business ad hoc since you are all family members; however, to avoid any wrangles and misunderstandings in the future, it is proper to write any agreements and contractual obligations down. Shares, duties, compensation, etc. should all be in writing.
Delegate roles with everyone’s expertise
Though it is a family business, it is not wise to employ relations who do not have the requisite skills for any vacancy they seek to fill. Any employment of a relation should be based on what knowledge and skills they bring to the business.