If you have ever seen the HBO show Succession, then you would know that running a family business can be so much more challenging than running a regular business where the owners are only connected through the venture. However, despite the hurdles, starting a family business can yield so many benefits:

  • If the business succeeds, the parents can ensure a financial legacy that will allow their children and their children to be stable for the rest of their lives.
  • The people involved might be more committed and devoted to the business since they are bound by blood and not just financial obligation.
  • There might be decreased cost since family members might be more willing to contribute pro bono or to provide financially if the business ever finds itself in a rough patch.

Here are some tips to set your family business up for success.

Get your the finances and legalities in order

One of the best things a family business can do before they start setting up shop is to consult with a lawyer, preferably an experienced bankruptcy attorney or someone who specializes in family businesses. This is because a lawyer who specializes in this specific area of business can help families come up with the following:

  • A viable succession plan if the main person in charge wants to retire or is suddenly indisposed, which will help the family avoid conflicts as soon as possible
  • An exit strategy for family members who don’t see themselves being part of the organization for the long haul
  • A clear set of expectations so that members of the family and the organization know what is expected of each other on the job, and also if the business finds itself in a tough financial spot
  • A well-defined set of roles, compensation, and ownership stakes

Having a clear plan for the above will set your family business on a path to success that is properly laid out. While the family members can certainly plan this out by themselves, consulting with a lawyer can help them know all their options, as well as the best paths to take to help protect the business and ensure its success.

business meeting

Establish proper boundaries and rules

Because a family business will certainly blur the lines between the members’ personal and professional lives, they must set a company culture that will allow everyone to thrive and be the best versions of themselves—both as members of the family and employees of the company. Here are some tips for ensuring proper boundaries and setting some rules:

  • Teach everyone how to separate their work lives from their personal lives. Establish a rule that when work hours are over, then no one is allowed to talk about the business anymore. Keep business talk out of the dining table at all costs, and set boundaries with family members who are not part of the business. Kindly tell them that if they are non-employees, then their input and feedback may be considered, but only as consumers and audience, but not necessarily as members of the organization.
  • If you are the owner, create a culture that treats everyone equally. Parental favoritism can be incredibly harmful to children, and it’s a habit that shouldn’t make it into the family business. Avoid comparing your kids and how they work. If you are hiring outside help, make sure not to treat all the employees in the same way. When you’re at work, they’re your colleagues and workers, they’re not your children or relatives.
  • Teach your children the reality of their privilege, especially if the business is incredibly successful and lucrative. Tell them the value of lifelong learning and earning the honor of working for the company, especially if you also built it from the ground up. Require them to finish their degrees and get outside experience before coming on board. They will be all the more appreciative of how you established this business from zero to sixty, and they will be more likely to want to care for it and protect it the same way you did.

If you have a knack for business and you want to pass this life skill on to your kids and the generations after them, consider starting a business in an industry you know a lot about. Additionally, experts say 2021 may be the best time to start a business in the United States.

Some of the best things we can pass on to our kids are the values of hard work and perseverance, and starting a family business is one of the best ways to do this. Believe in yourself and in them as well.

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