Skip to main content

8 Steps to a Better Family-Owned Business

Jul 06, 2017 01:00PM ● Published by Melanie Heisinger

by Warren Williams

New businesses don't necessarily start out to be a family-run entity. Through the process of growth, family members can become engaged in the business and over time become ‘family owned'.

All businesses have challenges, and family businesses are no different. Problems are exaggerated in a family business. For example, ever tried to fire your son, father or mother-in-law? Know going in that you'll have to work hard to make it work.

The inherent emotions of family issues, relationships, financial and health problems can make things difficult. Confusion about roles and responsibilities and a tendency to be lax on who's in charge makes it hard on non-family staff. Who do they really work for, and who should call the shots? What about passing on the reins to the next generation? The lack of a timely plan and effective training for the new owner can be disastrous.

Left unaddressed, these challenges can cripple the business, particularly during and after a generational transition. Statistics show that a significant majority of family-owned businesses don't survive to the second generation; even fewer to the third. There is a famous saying in Mexico about family-owned businesses: "Father-founder, son-rich, grandson-poor." The founder works to build the business, the son takes it over and lives well while ill-equipped to manage effectively, and the grandson inherits a dead business and empty bank account.

Here are 8 steps you can take to avoid your business becoming a statistic:

1. Determine that the needs of the business should and will outweigh the personal interests of the participating family members. Write this down, commit to it, and don't forget it. Get this on the table early and get consensus. This should be a factor in every decision going forward.

2. Build a realistic business plan, and ensure all family members who are engaged in the business are on board.

3. Determine who brings what skills and realistically place people where they can be most useful. If the management team is lacking in a particular area, hire what you need.

4. Don't hire family members who are not qualified or lack the skills and abilities the business needs (remember #1?).

5. Determine in advance who is in charge. Put it in writing. Management by family committee isn't the best way to go. Get over the idea that everyone must have an equal share.

6. Define roles and responsibilities through clear job descriptions. Communicate throughout the organization.

7. Get outside help to build a written succession plan so that the transition of authority to the next generation is smooth. Train the successor.

8. Don't leave issues unaddressed. Get them on the table, and resolve with the best interests of the business in mind (there that #1 again...).

Working in a family business can be a real blessing, but it takes commitment and dedication to avoid the pitfalls.


By Warren Williams, President of TurningPoint Coaching 
www.turningpointbizcoach.com 
704.707.4333



This article presented by: 

TurningPoint Coaching for Business Performance Inc - Concord NC

TurningPoint Coaching for Business Performance, Inc.

Every business, no matter how small, has the potential to be great. The road to greatness is full of turning points, of opportunities and challenges. Each turning point provides a chance ... Read More » 

Like what you're reading? Subscribe to Cabarrus Magazine's free newsletter to catch every headline

Life+Leisure Advertorial Business
  • TODDLER STORY TIME

    11/23/2017
    10:30AM

    • Children from walking age to three years old with caregiver. Songs, stories, finger plays follo...


  • Speedway Christmas 2017

    11/23/2017
    06:00PM

    Speedway Christmas is returning to Charlotte Motor Speedway and is even bigger and better in its ...


  • BROWN BAG COLORING FOR ADULTS

    11/24/2017
    11:00AM — 02:00PM

    • Coloring books aren’t just for kids anymore. Bring your lunch and color your stress away. We pr...


  • Gingerbread Community of Hope

    11/24/2017
    01:00PM — 09:00PM

    Create a part of the gingerbread community of hope and see it on display during Dickens' Holiday ...


  • Speedway Christmas 2017

    11/24/2017
    06:00PM

    Speedway Christmas is returning to Charlotte Motor Speedway and is even bigger and better in its ...


  • Turkey Trot Dance Social

    11/24/2017
    08:00PM — 10:00PM

    After a day of enjoying your Thanksgiving favorites (maybe too much!) come out and have a fun nig...


It looks like we don't have any events for this date. You can always add an event.

  • A VET TOGETHER

    11/28/2017
    09:00AM — 11:00AM

    • Join Cabarrus Veterans Coalition the first Tuesday of each month at Carm’s for free coffee and ...


  • Beginner Belly Dance Class

    11/28/2017
    07:00PM — 08:00PM

    Have you always wanted to learn to belly dance but were too nervous to give it a try? Stop waiti...


  • Turkey Trot Dance Social

    11/24/2017
    08:00PM — 10:00PM

    After a day of enjoying your Thanksgiving favorites (maybe too much!) come out and have a fun nig...


  • Holiday Sip & Shop

    11/25/2017
    01:00PM

    Please Join Makers on North Union for a Holiday Sip & Shop! Hosted by The Bead Lady, Hive & Shoe...


  • On Saturday, November 25 at 6pm, celebrate the start of the Christmas season in Kannapolis with t...


  • Come celebrate an evening of exhilarating holiday entertainment with the Charlotte Civic Orchestr...


  • Sip & Shop

    11/30/2017
    09:00AM — 09:00PM

    Give the gift of North Carolina pottery this year during Sip & Shop, the Cabarrus Arts Council's ...


  • Live entertainment from a variety of local musical and dance groups including Victoria Layton (so...


  • A Broadway Christmas Carol

    12/01/2017
    08:00PM

    Created by Kathy Feininger PG Performances: December 1, 2, 3, 9, 10, 16, 17; 2016 @ 8pm ...


  • The Kannapolis Intimidators are hosting the second annual three-day Holiday Laser Light Experienc...


  • Cookies with Santa

    12/06/2017
    03:00PM — 05:00PM

    Bring your kids to enjoy cookies with Santa at The Galleries on Wednesday, December 6th from 3-5p...


  • Holiday Sip & Shop

    12/09/2017
    01:00PM

    Please Join Makers on North Union for a Holiday Sip & Shop! Hosted by The Bead Lady, Hive & Shoe...


  • Art Lab

    12/13/2017
    10:00AM

    Kids 8+ will learn the forms and styles used by potters and tour the Clay exhibition, Wednesdays,...


Get Cabarrus Magazine Delivered to Your Door!

Subscribe today!

Proudly Brought To You By These Community Sponsors