The vast majority of businesses in the US, roughly 90%, are family owned or controlled. There is something promising about going into business with your spouse, siblings, kids, cousins, or other family members. There are, however, many inherent challenges to successfully starting and growing a family business. Predictably, these challenges fall into two categories: issues pertaining to the family and issues pertaining to the business.
Let’s look at the pros and cons of a family business, exploring some of the leading issues as well as the potential ways to resolve them or better, to avoid them in the first place.
How to Make a Family Business Work
Positive Aspects of a Family Business
To be sure, there are a lot of good things to be said for building a successful business as a family, for the family. For example, all the positive dynamics that may exist in one’s family—such as loyalty, support, and encouragement—may also be manifested in the business. People who enjoy being around each other all the time may do so.
The freedom of personal expression and opportunity to directly influence the direction of the business can also be quite satisfying. Attributes such as job security, wages, and advancement opportunities can also be quite favorable in an established and growing family business.
Achieving a balance between time devoted to one’s work and time allocated for everything else has become the holy grail of the working professional. It’s difficult enough to achieve an acceptable work-life balance when the people you see at work and the people you see at home are two separate and distinct groups. Now imagine working, living, eating, sleeping, commuting, and taking vacations with the same people year after year. Could you do it?
Many people do, every day. But how do you and your family business associates achieve a work-life balance under such circumstances? By striving to give 100% to work while at work, give 100% to home while at home, and recognize the difference between business vs personal issues and concerns. Many problems arise when family conflicts spill into the workplace and vice versa. It may not always be easy, but leaving your problems at the door, both at work and at home, is a big step in the right direction.
Who’s the Boss?
This is a big deal, especially among spouses, because even if everything is a 50/50 proposition at home, when running a business, sooner or later somebody must be the boss. There will surely come a time when even after much discussion, not everybody agrees on the best course of action. At that point the leader must make the tough decision and hand out marching orders. In such times, this could cause some resentment—unless the organizational roles are clearly defined and agreed upon from the start.
Consider drawing up a Code of Conduct for your family business. This is a written document that spells out the expectations of how family (and non-family) members involved in the business will conduct themselves. This may include decision making, information sharing, conflict management and more. Following an agreed upon Code of Conduct will benefit both family and non-family employees alike.
Nepotism and Other Ethical Issues
Ethical issues arise in both family and non-family owned businesses. This includes nepotism—the intentional act of favoring relatives over other candidates for job opportunities, promotions and more. Nepotism may occur in any type of organization, not just family businesses.
Oddly enough, there may be legitimate reasons to favor a family member in a family business. For example, if a given individual has been expressly groomed for a position in the family business, that person may be able to contribute intellectual capital (knowledge and experience of intangible value to the company) in ways that other candidates could not.
That does not mean non-family employees won’t resent the action. Make it a written policy to never give an opportunity to any candidate who is expressly less qualified than another.
A similar issue concerns making business decisions that may favor the family or certain family members while hurting the business itself. This circles back to the importance of separating business vs. personal interests. If the goal is to develop a legacy that can be passed on from generation to generation, acting in the best interests of the business must take priority over feeding one’s ego or lining one’s pocket.
How Spring-Green Supports the Family Business
Spring-Green understands the pros and cons of a family business because Spring-Green is itself a family owned business. From father and son to spouses, Spring-Green keeps in mind franchise owners family’s futures and plans for how to grow their operation, increase market share and improve bottom-line performance. Call 1-800-777-8608 or visit us at www.growmygreenindustrybusiness.com to learn more.