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Family Business Tips

One thing that is very common in people is their dream to have their very own family business. Most people desire to establish a business which will provide them and their next generations their needs.

However, in reality, many of these family businesses fail. Sad isn’t it?

But one thing that will surely make your family business a success, that is if you are planning to establish one, is keeping in mind that it is not all about making money.

One of the most common mistake and cause of the failure of the many family business is that the person who handles the business operations does not make a business plan. Two other mistakes are the absence of marketing strategies and failing to create a board of directors. Bear in mind that it is a business. And since it is a business, business plan, marketing strategy, and the board of directors are its fundamental and vital components.

These components must not be taken lightly. Just because it is a family business that you will be establishing and you have no outside investors, you will run your business haphazardly. Thus, make a business plan, distribute your plan to the members of your family and outline a plan for the purpose of succession. Planning for succession will ensure the survival of your business if someone will be opting out.

Partnerships

Sadly, there are times when a family tries their best to start a future together but the efforts results to family failure. The frequent cause for a family fight in a family business is that there is no solid lines which should have been drawn between the people who will be responsible and heading the business and those who are not. In this kind of situation, the best solution for this is to put all the agreements of the members of the family in writing. This way it will be a lot formal. Unity among the family members will also be shown in this method and respect will be earned by the members who will operate the business. Moreover, expectations will also be cleared from the beginning. It is also very helpful to be professional in your family business. This means separating the business from your family affairs and vice versa. Combination of the two will definitely lead to a disaster. Maintain everyone’s focus on their task.

Hire Someone outside the Family Circle

When starting your own family business, consider also of rendering the services of people outside the family circle like lawyers, bankers, business consultants, and certified public accountants (CPA). Their task is to review the operational decisions as well as the input of the family members. This way, family feuds because of family hierarchy will be avoided. By this we mean that usually men don’t want their wives to be the one doing all the decisions and parents may not take their children’s suggestions seriously.

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