How to manage a family business
Family-owned business are huge in America and only growing faster each and every day. While the family-owned business has been around for years, more and more people are discovering the benefits of running their own business and working for themselves. While it has its benefits, it can also be incredibly stressful and is more than a full-time job. Phillip Thow offers his advice on running a family business smoothly:
Keep Family and Business Separate
This point is difficult but crucial. Phillip Thow says that when running a family business, it is usual to hire employees that are relation or that have been friends for years. But think about this from a management standpoint; are these employees going to easily and readily take orders and direction from you, as a good friend or family member? Sometimes in this situation is seems ideal, but can lead to disaster. Phillip Thow recommends keeping is separate. Draw a line. Don’t hire family or friends and keep it professional. This is the easiest way to avoid messy arguments, and severed relationships. If you do decide to hire family or friends as employees of your family business, be sure that the employee understands that they are now in the role of employee when on the job and not family or friend. They need to understand that decisions and direction will be based on what is best for the company, not who’s been friends the longest or who’s closer in relation. Phillip Thow urges managers to remind these employees that constructive criticism is not personal, but a business matter and should be treated as such. This will help deter any possible arguments and issues in your personal relationships with these employees.
Have a Plan
Before beginning a family business, make sure that you have a plan of action on how your are going to operate the business and a future plan for what happens to the business in the long run. What happens to the company if you pass away? Will you pass the company onto relation or sell outright? Phil Thow says that once you have determined your plans for the future of the business, lay out what you will expect from employees that will be working for your family business. Is a college degree required? Will you require any tests prior to employment? How often will raises and promotions be offered? Phil Thow highly recommends creating these guidelines from the start so that you don’t run into difficult situations later that could easily have been avoided with some easy planning.
Have Proper Communication
Communication! Communication! Communication! Phil Thow says there is no better tool that open communication when running a family business. It is crucial. Listen, ask questions and always give your undivided attention to your employees and their ideas, thoughts and comments. Make sure that you convey your business plans to each employee so that they know what you are expecting and so that they know what they are working towards. Direction is key. Communication creates direction! This makes every employee see that they are just as involved in the success of the family business as you are.
H/R Department
Phil Thow suggests appointing a non-related person handle H/R decisions and functions. This is often times an expense that family businesses don’t feel that they need to fork out. Phil Thow says it is essential for the success of your business and the overall comfort level of your employees. If you have a non-family member in charge of H/R decisions and functions, employees will feel more comfortable in addressing concerns, questions and issues about the work environment. Phil Thow says that this creates a better platform for open communication.
Departments
If you have multiple departments in your family business, try to keep it a rule that only one family member works in each department. Putting multiple family members together in a work environment can create friction and potential problems and often times lead to personal issues interfering with professional work. Phil Thow says that this is an important rule to go by and should be utilized in every situation.
Credit
Having a business credit card available for your family business will help you to purchase critical assets needed. If this is a new prospect for you, there are many services available that help you to obtain business credit.
Running a family business is stressful but fun, and worth the effort. Just remember, Phil Thow says, keep business and family as separate as possible.