Three things to consider when starting a family business
In this world of big businesses like Amazon or even any of the leading supermarkets, it can feel like the age of the small family business is over. Every industry has its big names; for every small restaurant, there’s a big-brand Nandos or Prezzo just around the corner. Why go to the family-owned garage when you have Kwik Fit?
Looking at this, you might think there’s no place for the small family business. But that’s not true. In fact, 8 out of 10 people prefer independent businesses over the big names. So if you want to start one, you should go for it. Don’t let anything stop you. If you do want to pursue that idea, there are still some things you need to be wary of. Here are three things to consider.
Brothers, sisters, mothers, fathers. Your new family business will be a mix of relationships. And you’ll probably have a unique one with them that no one else has. That can make leadership tricky. Suddenly, you might come to blows over a disagreement about how things should be run. That’s why you need to establish who is leading the business and making all the decisions.
Then that brings another problem; now your family member is your boss, which can turn your entire relationship upside down. The key here is to separate your personal and professional lives. When you’re working, you aren’t family first – you’re colleagues. If the leader makes a decision, you have to stand by that, even if you disagree. By all means, give your opinion, but don’t take it personally when it doesn’t go your way.
Next, you need to decide what everyone’s roles are. By painting the boundaries of who does what, you achieve what you did in the previous point. You give the responsibility and final say on certain issues to particular people, reducing the chance of any murky disagreements.
This can include putting people in charge of accounts, purchasing, sales, or any other facet of your business. This may be a family affair, but never forget that it’s a business. It should be run like any other company.
Money can be a point of contention, so it’s best to set the guidelines when you start. This includes what you’re going to do with the money. Some may want to take more when it comes to paying out, while others might want to invest it back into the business. And some may want to invest in infrastructure while someone else might want to focus on staff.
There are plenty of disagreements that can stem from your money, so it’s best to decide how you will handle it now. As above, make it someone’s responsibility to have the final say after taking everything into consideration.
These are just three factors that might cause issues in your family business. But by acting professionally, you can prevent any disastrous moments. The important part is you respect each other, make decisions together, and do what’s best for the business.
At Big Hand, we’re just one of many family businesses thriving. If we can do it, so can you. If you need help or advice in your new business venture, feel free to get in touch on 0161 327 2911.