So you want to start a family business?

Be prepared to train for success

In the year 2000, I decided to turn my then three-year side hustle into a full-time gig. Never in my wildest dreams did I think that five years later it would turn into a family business, when I welcomed my husband, mom and sister-in-law into the business.

What I also never thought about was the structure, guidelines, routines and boundaries needed to keep the business growing, but more importantly to protect the relationships that we had outside of the business.

After 15 years of working with family in my business, many things have changed.

 

Today, I share with you some of the important lessons that I have learned while operating a family business.

Advice from one who’s been there

A family business is a special kind of business. It requires special accommodations to keep it growing and the relationships strong outside of work hours. Here’s my advice:

  1. Assume nothing.
  2. Have one common goal all are on board with.
  3. Be clear about timelines, deadlines and schedules.
  4. Allow each family member to do the work they love.

Reading my family’s business story might help you get off to a strong start and avoid the pitfalls along the way. Read on.

1. Assume nothing

 Family Business Man Working Inside Kitchen
Regardless of the type of family business you start, the issues will be similar.

When my husband joined me in the business in 2005, I was excited and ready to work alongside him. I was, for some reason, convinced that he could simply pick up on how I ran the business and would know how to run the software and systems that I used.

I never anticipated having to train him on how the business operated and what needed to be done.

I also didn’t realize the strain this would put on our relationship outside of the business.

The frustration, stress and anxiety became something of a regular thing because I did not set him up for success. It never occurred to me to create a plan for him that included:

  • Training in the areas that he would be working in
  • Clear expectations
  • Timelines

If I had done this, most of the negative feelings could have been averted.

The special status of family

Because they are family members and not employees off of the street, we tend to have higher expectations of them. We think that they should know more than they do, when in reality they don’t.

The best approach the leader of a family business can take is to treat the onboarding of a family member as if they were an employee that they are hiring. This way nothing gets missed, expectations can be met and the relationship outside of the business can remain strong.

2. Have one common goal all are on board with

With family members working together, it can become very apparent that each member has a different vision of what direction they feel the business should be going.

When you have multiple people trying to take a business in different directions the business will not grow.

If everyone has different goals, the business will suffer and possibly close its doors. For example, one business might have a family member who wants to expand the square footage of the space, while another family member believes that creating an online store as an arm of the business is the best use of resources.

Family Business Tug of War
If the members do not agree, the business will remain in the state it is currently in.

In the worst case, family members who disagree will each decide to go ahead with their idea against the others’ wishes.

To avoid all this wasted time and family stress, make sure that all family members:

  •  Have the same goal for the business
  • Understand the vision
  • Put the business before their own personal gain

When a family business moves from a small business into a medium-size business or larger, it is a best practice to create a board of directors that includes the family members as well as non-family members (aka other employees).

Give all board members voting rights on any decision that will change the direction of the business. This way there is a neutral party in the decision-making for the business.

Bonus: Having a board of directors will also keep the negative business talk away from the dinner table because all items need to be reviewed by the board, together.

3. Be clear about timelines, deadlines and schedules

The worst, and I mean THE WORST, part of working with family members is the scheduling of work, projects and personal time.

There will come a time when someone misses a deadline that’s vital to keeping the doors open.

And it is worse when those people are your family members. Because they should know how important it is — not only to the business, but to you — that they meet the deadlines they’ve agreed to. If these items are not spelled out for everyone to see, then they can cause issues within the business and in the family.

Vacation time also can create resentment within the family business. It is important to discuss and book vacation time, just like one would with an employee.

Here are a few strict rules our family lives by:

Shared sign-off on timelines

It is important that all family members who are part of a project understand and agree to the timeline needed for successful completion. They need to know their duties, the deadlines and where the project is at, at all times.

Using project management software like Trello, Asana or Monday.com can really help take the tension out of the family workplace.

Deadlines everyone agrees to

When working with family, make sure that all parties involved in a project are made aware of the deadlines. In fact, you should bring everyone into a meeting to discuss their ability and dedication to creating a deadline that works for everyone.

A public schedule

We have a yearly calendar in the main office that has all the important dates, deadlines and happenings in the business.

We also add the important dates for the family like birthdays, anniversaries and get togethers so that we don’t plan big projects to be due around these dates.

It takes a lot of stress off everyone — especially when you must work all day with them and then have expectations to be happy and vibrant at a dinner party that evening. We also add all vacation time to the calendar as well.

The more you can connect, communicate and make decisions together, the more positive working with your family will be.

Related: How to write a business plan simply 

4. Allow each family member to do the work they love

 Family Business Woman and Man Talking

It is so important to know, understand and use the skill set of each family member involved. If you place someone in a job that requires a skill that they don’t have, then you are setting them up for failure. Take the time to know what each member is great at and create a position in the business that best suits them.

A great teaching tool

All four of our sons are a part of our family business. We invite them into the business early so that they could get a taste of helping others, working as a team and making a bit of money.

  •  Our 10-year-old loves to shred paper, tidy the office and organize paperwork alphabetically.
  •  Our 13-year-old loves to create music, record and edit videos (and he is really good at too) so those are his jobs.
  • Our 15-year-old runs our online stores, buys and sells and works an element of our social media.
  • Our 17-year-old has his license and a creative eye. He is our delivery boy, dabbles in some of the graphic design and is slowly learning other aspects of the business, including the banking.

All four boys are working in their elements. I would never swap their duties or ask them to take on another’s task because they would not excel at them.

Of course, I could have given you many stats on how family businesses are driving the economy. I could have shared with you other best practices like:

  • Legal agreements
  • Knowing who is the final decision maker
  • Creating a plan to move the business from one generation to another

But I thought it would be best for me to share some of the lessons that truly changed the trajectory of our business and saved our family relationships, including my marriage. The Government of Canada has a great article on managing a family business that is also a great read.

Family business: worth the effort

Running a family business is hard, tiring and frustrating at times, but it is also so very rewarding in so many ways. Being able to converse with family members on a daily basis keeps our lines of communication open, not only in business, but in life.

I personally would not have it any other way.

 

Here I sit, officially 20 years in business and I know, without a shadow of a doubt, that I would not be here if it wasn’t for my family being so involved in the business.

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Sara Clarke
Sara Clarke is a multiple business owner, speaker, author and columnist. She has over 20 years’ experience in business consulting and accounting. Sara founded Martin Clarke & Associates in 2001, where she now oversees the operations. She is also Chief Operating Officer of Mompreneurs(R), an international organization that supports, educates and celebrates female entrepreneurs. Sara speaks throughout North America on time management, money mindset, business development, bookkeeping and Mompreneurs. As a wife of 17 years and a mom of four boys, Sara has a passion to help entrepreneurs to be their own boss, set their own hours, travel their own journey and be there for their families. You can find her on Facebook and Twitter.