Five Tips to Running a Successful Family Business

Great family businesses share certain traits: loyalty among the team, vigilance and competitiveness in their fields. They have found ways manage conflict and figured out ways to make decisions when there are differences of opinion. Yet real pitfalls lurk. Avoid potential pitfalls with these tips. Establish good boundaries. Give family members clearly defined roles, specific job responsibilities and authority. Consider writing specific job descriptions. Talk openly about how you plan to keep family issues—like sibling rivalry or marital conflict—from spilling over into the family business. Write a list of do’s and don’ts for everyone to follow. Remember you have two ears and one mouth. While close family members tend to have insights into each other’s thinking that wouldn’t exist among business partners who aren’t related, it’s essential that they hear each other out on business matters, rather than assuming they know each other’s views. In a word—listen. Fight insulation from the outside world by seeking counsel. Start an advisory board to add knowledge, skills and experience that go above and beyond your family members. You don’t want to get in a situation where other family members are afraid to tell the truth and possibly lose out on the gravy train. An advisory board ensures you will have people tell you what’s in the best interest of your company Create a strategic plan. Create an action plan that answers these questions: Where is the business going? What are the goals? How will we get there? Who will do what? What are the timelines? Manage your conflict. A certain amount of conflict is healthy, but the trick is to manage conflict by managing expectations. Anticipate someone else’s reaction and anticipate the consequences to minimize conflict. For helpful lessons and success stories on family-based small businesses, check out How To: Run a Family Business on SUCCESS.com