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MNP's TAKE: Deciding to join or start a family business is certainly not a decision to made lightly. The rewards can be great: a clear shot at the top spot, financial security, a chance to work with people you love while building on your family's legacy and more. But, like any major career move, there are also risks involved. Blurred lines between family and business roles can create complex challenges.
With any good business relationship, communication is key. Set the tone early by engaging in open discussion, establishing expectations, defining roles and outlining your career objectives. When everyone's goals are in alignment with what's best for the business, you have a best case scenario for driving financial growth and building a family legacy.
To learn more about how to strategically transition into your family business, contact John Hughes, Senior Vice President, Private Enterprise at 416.596.1711 or [email protected]
BY BUSINESSVIBES FOR BUSINESS2COMMUNITY.
In a world in which corporate conglomerates dominate the economic landscape, many people long for a return to the personal touch that small businesses provide. Realizing that true value isn’t just the cheapest possible price, but the quality of their shopping experience, many people are willing to pay more to support small businesses that enhance that experience. One of the best, and most unexpected, results of the recent rise in unemployment is that many people have decided to go into business for themselves. If you’re considering starting or joining a family business, there are some benefits as well as potential liabilities that should be considered.
Family businesses are based on a view towards the financial success and well-being of future generations. Unlike startups, which often have a goal of building a business that will fetch a substantial purchase price from a larger competitor, family businesses are built to last. The success of family businesses depend heavily on community involvement. Often located in or near residential neighbourhoods, they often sponsor local sports teams, donate to local charities, and play an important role in maintaining community aesthetics and safety. Their efforts are usually rewarded by regular customers willing to pay a few dollars more than they might at a chain store.
Pride In Ownership
Numerous studies have demonstrated that employee-owned business invest more in human capital. The combination of a larger investment in employees and a higher degree of representation of their individual interests results in higher productivity. Additionally, rather than accepting a job which they may or may not have a genuine interest in, family businesses are developed according to the interests and specific talents of the family members involved. Another manifestation of this pride is the older generation passing on knowledge and skills to the next, with no school loans to pay back. Ownership also provides incentive because of the direct link between increased effort and increased reward.
The Creative Spark
In addition to increasing productivity, profit sharing also encourages creative thinking and innovative new ways of doing things. Research and development are an important aspect of any business. With technological advances occurring so rapidly that items and processes become quickly outdated, research on what the competition is doing is more important than ever. Learning to utilize what is already working for others as well as customizing that information to use more effectively for your own business can make the difference between success and failure. Family members having an intimate knowledge of one another’s specific talents, skills and abilities, as well as weaknesses provides a definite edge over the competition. Employees whose abilities are recognized, appreciated and effectively utilized also enjoy a much higher degree of job satisfaction.
Benefits Of Cross-Training
The small size of most family businesses often requires more from each member. Despite the added responsibility associated with cross-training, it helps prevent boredom and burnout. Being trained in every aspect of the business provides everyone with constant variety. The ability of employees to fill in for one another provides a whole new level of freedom and flexibility for them as well as greater stability for the business. Training also takes far less time when being provided by well-known family members who share similar communication styles.
Maintaining Boundaries Between The Personal And Professional
Separating the personal from the professional can be more difficult when you work with family. To prevent personal disagreements from having costly professional consequences, it’s important to create policies that all parties agree to adhere to in advance. Similarly, to avoid anyone taking advantage of close personal relationships, policies regarding minimum expectations for employee performance should be in place as well.
Policies outlining the requirements for pay raises, increased power and responsibility, and causes for termination are essential. Voting on such policies is useful because it is often more difficult to be objective concerning family members with whom one has a close emotional attachment. Some family businesses hire an outside consultant in difficult situations, which can help prevent the appearance of favoritism and possible damage to treasured familial relationships.
The ability to decide all these things together can usually transform potential liabilities into enjoyable benefits for the whole family.
This article was written by BusinessVibes from Business2Community and was legally licensed through the NewsCred publisher network.
Related Topics:Family; Small Business
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