Your goal in life is to run a small business someday. Here’s the catch: it’s a family business. If your ambition is to take over the family company, you face a different set of challenges than someone who is founding a startup. The tips below can help you prepare.
Get Your Degree
If you’re taking over the company from your parents or other family members, you might feel like you don’t need a degree.
Your family members who are currently running it might not have one, or you may simply feel that you can learn everything you need by working with them. However, there are many good reasons to earn a degree.
You may learn a lot about how to run the company more efficiently or effectively. Family businesses often fall short when it comes to management skills in particular, and you can learn more about these skills in school or even get your degree in management.
You might make valuable connections. Having a degree will also make you more marketable if you decide down the road to sell the company and strike out on your own.
Sometimes, people hesitate to pursue a degree because they are worried about the cost. Tuition and other expenses can be covered in several different ways, including scholarships. Additionally, you can apply for a student loan and calculate the payoff date using a student loan debt payoff calculator, which you can begin repaying after you graduate, so it makes finances less of a worry during school.
Communication issues can arise when you work with family members because of underlying assumptions. You may assume that you all know each other so well that you don’t have to be explicit about your expectations or methods. However, this approach can be a source of conflict and can even hurt the business.
Make an effort to communicate as clearly with family members as you would with any other employees. Be transparent, and consider scheduling meetings weekly or at whatever type of interval seems appropriate to discuss any issues and make sure that everyone is on the same page.
When you initially take over the business, you should also make sure that everyone knows their role and what responsibilities fall under that role. Put this in writing.
In fact, you should make a practice of documenting everything just as you would in any other type of business. Verbal agreements might feel friendlier, but they can lead to misunderstandings down the road.
Another problem that frequently arises when it comes to family businesses is a lack of boundaries. This can mean carrying family problems into work and bringing work problems into family gatherings.
You may have an additional hurdle to overcome if you are taking over the business and a culture lacking in boundaries has thrived there. Setting these boundaries takes a number of different forms.
First, you need to make an effort to treat family members equally even though you may have a more difficult relationship with some compared to others.
It is natural that you may have a deeper rapport with some than others, but try to approach this professionally, in the same way that you would in a workplace where you were not related to people and worked better with some than others. You can make a rule at work about not bringing family issues into the workplace.
You can also ask your family members to leave work matters at work and not bring them home or to gatherings. Keep in mind as well that you need to treat family members and regular employees equally. Family members should not get extra pay or other perks simply because they are related to you. This is a sure way to make your other employees feel as though they are not valued.
Succession plan is important in every type of business, but it can be particularly important in a family business where failing to plan properly could lead to conflict. There are a few things to keep in mind when it comes to succession planning. Ideally, you will retire as you intend, but you also need to allow for the possibility that you might become unexpectedly incapacitated because of illness or an accident. If this happens, who will take over?
You should involve your family in the succession planning, but the decision is ultimately up to you. You need to choose someone to take over who is both capable of and interested in running the company. Put all of this into official documents with the assistance of an attorney.