5 Tips For Success In The Family Business

culled from:http://beefmagazine.com

1. Communicate.
“Keep the lines of communication open,” he says. “Schedule regular family meetings to discuss issues of concern and topics such as business transition, business performance, and responsibilities. Include all of the family members, no matter where in the hierarchy their jobs fall – exclusion creates animosity. Create a family manual that lays out the ground rules for how the meetings will take place to ensure everyone gets a chance to be heard and impediments to communication are left at the door.”

2. Establish roles.
Assign clear roles and responsibilities,” Hutcheson advises. “As a family member, it’s natural to feel that everything is ‘my’ business. However, not everything is every family member’s responsibility. Job definitions prevent everyone from jumping in to tackle the same problem, and help ensure the business runs smoothly.”

3. Maintain up-to-date financial records.
“Keep good financial data,” he says. “The downfall of many small businesses and family businesses is not having solid data. Have a single point of contact to manage the finances. If you’re small enough, you can rely on a family member. Otherwise, you’ll need to bring in a qualified accountant. You may cringe at the cost for this, but the difference between a good accountant and a bad one is the difference between knowing exactly where you are on the road and trying to drive with a mud-covered windshield.”

4. Avoid overpaying family members.
“Parents in family businesses tend to overpay the next generation, or pay everyone equally despite differing levels of responsibility,” says Hutcheson. “Both are bad practices. The longer unfair compensation practices continue, the messier it will be to clean up when it blows up.”

5. Don’t hire unqualified relatives.
“Competence is key,” he says. “Family businesses are a conundrum: The family aspect generates unqualified love, while the business side cares about profits. Thus, family members will be hired to provide them with a job, even though they’re not qualified. The remedy is to get them trained, move them to a role that matches their skills, or have them leave.”