One of the greatest challenges of running family businesses is that they contain, well, family. Based on my experience working with and being a part of family businesses, I’ve learned that success requires everyone to work together harmoniously and as if they are not related.
This can sound difficult, particularly for parent-child or husband-and-wife teams, but it’s possible if everyone agrees upfront to set aside their egos and family relationships, roll up their sleeves and work toward a common goal of ensuring the business’ success. How can you do this?
It is important to recognize that your issues are probably not unique and you can learn a lot from others. Currently, family businesses comprise 90 percent of all business enterprises in the U.S. and 62 percent of total U.S. employment, according to the Small Business Administration. So take advantage of the vast knowledge, tools and other resources available today by working with consultants and business coaches who specialize in helping family owned businesses. This is a good idea for non-family businesses as well.
Having seen the good, the bad and the ugly when it comes to family businesses, I can offer some practical advice:
• Put in place the right employment policies and job responsibilities, including detailed job descriptions and goals, and enforce them consistently. Get buy-in and support by reviewing the policies with everyone.
• Routinely measure performance. Employee evaluations are helpful. Hire a non-family Human Resources Director or business coach, for example, to lead the evaluations and approve things like salary increases and vacation time. This can also help with family members who need to be fired.
• Put outsiders in positions of power. Smart business owners have independent boards of directors to give advice and often put non-family members in management who have no allegiances to anyone in the family. It is wise to employ non-family members with the strength of character to stand by their convictions and focus on what’s right for the business. This helped one of my firm’s clients when she had to make decisions that contradicted the wishes of her mother, who was a silent investor.
• Establish a clear chain of command for everyone to follow. In addition to helping reduce the likelihood of people feeling entitled to special privileges and abusing their family ties, it also helps other employees feel more comfortable with their jobs when they know the same rules apply to all. Giving family special privileges will cause problems and tensions among others and possibly undermine the success of the business.
• Reward results rather than genetics. Some of the people who matter most to family businesses – including employees, clients, referral sources and even potential buyers of the businesses – often assume that the business owners give preferential treatment to their kin. For a business to be taken seriously by all parties, everyone must believe its run fairly and with the best interest of the business at heart.
• Don’t hire your children unless they have sufficient interest and aptitude, and don’t give them too much responsibility too quickly before they have proved they’re ready. When there are problems with children, face them head on. It’s also wise to encourage your children to get experience working at another business before joining yours. My son, Philip Cassel, for example, acquired good training and experience at two other firms that made him a stronger asset when he joined Cassel Salpeter.

















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