Family businesses dominate the American market. Around 90% of U.S. businesses are family-owned, according to the U.S. Census Bureau. These companies are also responsible for employing over 60% of the country’s workforce, according to a recent report by business mentor providers SCORE. In fact, a lot of big companies like Wal-Mart, Comcast, and even Ford are family-owned.
Starting a business with your partner, or even your whole family, is challenging as it is fun. On the one hand, it’s a dream come true to earn while spending every minute with your loved ones. On another, there’s also the occasional arguments ranging from doing the dishes to who should really be in charge. However, creating and running a successful company means that you can leave a fruitful legacy behind to your partner or children.
Whether you’re starting a restaurant business or capitalizing on an opportunity for a commercial cleaning business, here’s what you need to consider when starting a company with your loved ones.
One of the first hot-button topics you’ll discuss with your loved ones is each member’s role in the business. Of course, you don’t want anyone to feel like they’ve been given an unfair assignment. This may lead to in-fighting that can bring down your business it even opens. To avoid this, make your assignment process formal and organized.
Interview everyone involved and ask them about their strengths and skills. Once that’s done, take your time in assigning each person to a role. You may need your spouse or another senior partner to help you out with this. Once you’re done with assignments, gather everyone and make the announcement. Make sure to be clear about each role you assign your members. Create definite limits to what they can do or manage.
When you’re running a company, whether you’re with family, friends, or business partners, you can never truly avoid conflict and misunderstanding. As such, you should draw clear boundaries between work and home. An easy-to-understand rule is to never discuss family matters at work and avoid talking about work when at home unless there’s an emergency. This way, you don’t get distracted by personal problems while in the field, and you can relax once you finally get to sit on the couch.
Thinking of an Out
While it’s sad to think of an exit plan, it’s essential for any family business. You don’t want your family to be in hot water after spending all your savings on an investment that just didn’t work. Take your time in drafting one and decide whether you want to sell the company or transfer it to a successor. You should also ask your accountant or financial advisor on the best way to cut your losses.
Creating a family business is thrilling and difficult at the same time. You will encounter challenges like personal arguments taking up work hours (and vice versa) and the occasional financial hiccups. To survive through thick and thin, you need to be transparent and precise about everything — from roles to your business’ exit plan. The biggest reward isn’t that your company finds success, it’s that you reached that success with your loved ones.