By Hannah Lynch
Nov. 2 (BusinessDesk) - What do Fletcher Building, Wal-Mart, Samsung and Ford have in common? They're all originally family-owned and operated. Even international companies have humble beings at Grandma's kitchen table.
Going into business with a family member can be a great option. You're familiar with one another, you share a sense of unity and purpose. But it can also cause problems.
Working with a family member or partner means it’s easy to take one other for granted. It's simple to let business concerns and discussions spill into your personal lives and if things go pear-shaped, the consequences are far more serious than a slap on the wrist. It might mean you're unwrapping a frozen Christmas dinner for one.
It sounds odd but you're a business first and a family second.
Therefore the usual business systems and legal processes must apply. Never assume that because you're family you don’t need written agreements and clear rules. Having proper systems in place is the best way to prevent emotions from sabotaging your business.
Tip one: lay down the ground rules.
Develop a written agreement specifying exactly how your business will run. Ideally, get a lawyer to check and witness it.
Decide who will do what, the hours you'll work, how much you'll pay yourselves and who's in charge of day-to-day bookkeeping and financial records.
Tip two: succession planning.
Prevent frozen meals for one and think about succession planning early - don’t wait until Grandma's no longer capable of running the business – agree well in advance when the handover will take place and who will take over.
That's particularly important for businesses made up a several generations i.e. a parent and one or more of his or her adult children.
Remember: the older family member doesn’t have to leave the business straight away. They could stay on in an advisory role or come in for a few hours a day.
The person taking over the business doesn’t have to be another family member – sometimes an outsider is a better choice. Your SME may have grown beyond your family's skills and expertise.
Remember: the turnover of non-family staff members in family-owned businesses is often high because newbies feel unwelcome or unfairly treated. That's why written agreements and clear rules are important so everyone knows where they stand.
Separating your business and your personal life is one of the biggest challenges of running a family-owned SME. It's hard to stop yourself from talking about work when you’re at home. But don't!
To stop that happening, hold regular meetings during work hours so you're not talking about business matters at family gatherings.
The best family-owned businesses embrace and effectively manage the quirks of mum, dad, grandma, Aunt Jackie and cousin Barry. Running a family SME is hard work but the rewards and possibilities are endless if you get the balance right.
You've just got to remember that blood is thicker than water, but that doesn't mean it'll all be plain sailing.