If you grew up working in your dad’s business on weekends or school holidays, you might be thinking about heading into the family business. However, there’s a lot to consider before making that type of commitment.
Going into business with family can be risky because failure or success impacts the relationships you have with loved ones. Before going ahead, you should consider a few expert tips from the lawyers Essendon firms can offer.
Avoid Damaging Family Relationships
We’ve all heard the expression that you should never go into business with family because it always ends badly. Sometimes the reason these types of situations end badly is that there weren’t proper guidelines put in place to begin with. Take a look at these seven tips to consider when going into the family business.
Set Clear Boundaries
The most crucial part of going into business with family is setting boundaries. Personal issues shouldn’t be discussed or taken to work. And at home, work shouldn’t be discussed. Each person entering the business must know exactly what their role is.
Make sure that all members of the business are treated fairly, and family members aren’t given preference. The company rules and guidelines apply to everyone in the business and are applicable during office hours only. Work issues shouldn’t influence personal relationships in the home environment.
Draw up Job Descriptions and Contracts
It can be difficult to manage a business with some family members who might use their family ties to get special treatment. For instance, they might arrive late or leave early. Irrespective of what anyone’s position in the company is, they must have job descriptions that specify job functions, privileges and rights within the business.
If you’re not the owner or manager of the business, ensure that the person in charge gives you a contract of employment. This will ensure that you aren’t taken advantage of. Often a business owner might push more work onto you because you’re “family.”
Obtain Legal Counsel
Don’t wait for trouble or soured relationships before consulting a lawyer. Get the advice of a lawyer specialising in family-run businesses. They will be able to advise you on the types of contracts and guidelines to put in place. They will also be able to advise you of your legal course of action in the event of any business hiccups.
Communicate Regularly
Regular, open communication is a major contributor to a successful business. Ensure your employees (family and not) are fully aware of the vision and goals of the company. Have regular meetings that focus on two-way communication.
Update everyone in the company of the businesses progress and future plans. Be open to constructive ideas and give credit where it’s due. Ensure that family members and their potential ideas aren’t given preference to other employees simply because they’re family. The success of the business should be the number one priority.
Create a Succession Plan
While your business might still be in its infancy, it’s important to create a succession plan. This is important in companies where parents and children work together. It becomes vitally important when more than one sibling is working at the company.
The last thing you want is to ruin a family relationship over a misunderstanding over who gets the company when you retire! If you are one of the siblings in question, be proactive and ask for the succession plan. This will prevent you from working for a company for 25 years under the guise that you’ll inherit it.
Prove Your Worth
Working in a company that’s run by your parents or an uncle will always give the impression that you only got the job because of your family. Make sure you prove that you are the right person for the job, no matter who you happen to be related to.
That will go a long way to earning respect with the other employees. Remember, in the long run, you might need the loyalty of those employees when you take over the company!
Avoid Partnerships
It might seem like a good idea to run your business as a partnership with one of your siblings, your best friend or even a parent. On paper, this might look like the perfect plan. However, if one of the partners decides they’re no longer interested, the company will have to dissolve.
Alternatively, they may nominate a person to take over their share, and it might not be a person you feel is right for the job. Unless you have a contract in place that stipulates the exact procedure when a partner wants to leave, avoid partnerships.
Final Thought
Family-owned/run businesses don’t have to be as stressful as they’re often made out to be. Be sure to follow the guidelines we’ve highlighted before you sign on the dotted line. Get the advice of a reputable law firm that will guide you in making the right decisions.
Ensure there are contracts and concise guidelines in place for all employees. The bond that makes your family unit successful can be the same one that makes a budding business equally successful!
