Managing a Family Business
Family businesses have been at the core of America’s wealth creation for centuries. Founders take a leap of faith to launch their business, often risking everything they have and spending their waking hours hoping to realize their vision. Some will achieve success, but with success comes a new host of challenges, like balancing the demands of family life and business needs.
While many people understand that the chances of a small business succeeding are slim, few understand the difficulties of building a business around family dynamics. At best, the family acts as a source of trust, loyalty, and dedication. But in the worst cases, resentment and toxic relationships can create divides and an unhealthy work culture.
It’s challenging to keep family and business boundaries from becoming entangled, especially when family and business roles overlap. When the roles of parent/child and spouse/spouse are mixed with boss/employee and business partner/partner, there’s a possibility of family and business goals becoming convoluted, which isn’t healthy for anyone involved.
Aim to keep family and business goals separate. Family goals are often emotions-based and focused on nurturing and acceptance, whereas business goals tend to be logic-based and focused on customers and profits. While it can be difficult at times, the boundary between work and life should be clearly defined and communicated, so everyone feels heard and respected.
Creating a Plan
Collaboration is often considered essential to creating healthy boundaries between family and business. By involving everyone, you’ll be better able to define your family values and use them as the core of your business’ shared vision.
Consider planning some time to meet with your family and create separate plans for your business, family, and personal goals. Each of these areas may benefit from having its own separate mission statement, roles, and expectations to guide family members both within and outside of the business. These plans should be monitored separately so that if conflicts arise, they can be addressed by the appropriate people. Depending on the size of your business, you may even consider creating a family council or advisory board to help address conflicts and issues.
As the business and family matures, the needs, wants, and dispositions of each family member may change. By striving for transparent communication in both personal and business enterprises, everyone will be more likely to adhere to boundaries.
At Glownia Financial Group, we know the dynamics of a family business - because we are one! In fact, many of our clients operate family-owned small businesses, or plan to recruit a family member as part of their succession plan.
If you own a small business and would benefit from a second opinion about your operating structure, exit-strategy, or employer-sponsored retirement plan, please contact us for a complimentary review!