Tips for Starting a Family-Owned Business

Embarking on a business venture with your family can be a great way to enter the world of entrepreneurship. When armed with your most-trusted team of colleagues, the overwhelming task of business ownership can seem less daunting and more manageable. If you’re planning on starting a family-owned business, keep these expert tips in mind.

Decisions to Make When Starting a Family-Owned Business

If you’ve decided a family-owned business is right for you, you’re not alone! Almost 60% of the private sector workforce is employed by one. To help ensure success as you make your next venture, here are a few factors to consider.

Business Planning

As you prepare to take on a new business alongside your family, be sure that everyone is in agreement with all business arrangements and strategies. Whether you choose to start a business from scratch or buy an existing one, drawing out a clear business plan is a must. A few things to consider when planning your future business include:

• Finances
• General operations
• Marketing strategy
• Company mission
• Communication strategy
• Work-life balance

Be sure to keep your business plans in mind as you progress and document any future changes for reference down the line.

Assign Roles

As you craft your general business plan, be sure to assign everyone involved a specific role in the company. Determine who will handle what jobs in day-to-day functions and consider developing a process for hiring future employees—both family-related and not. While some duties may cross over job lines in the long run, make sure there’s a clear path to start with.

Create a Protocol for Conflict

While family-owned businesses present a wealth of pros, they can also bring occasional conflict. It’s not uncommon for emotions to interfere with business operations, so you’ll need a protocol for conflict in case they arise. Family conflicts can range in severity from minor personal disputes to larger issues, including job termination. Whatever protocols you decide to put in place, be sure you and your family are clear on them from the beginning.

Plan for the Future

Though a lot of your focus will be centered on developing your new business, it’s important to take time to plan for the future as well. After all, not every business is successful in the long run. To help ensure you beat the odds, start succession planning sooner rather than later. Some questions you may want to think about include:

• What steps must I take before exiting the business?
• When do I want to exit the business?
• Who will I transfer ownership to?
• Do potential successors have the right skills, or do they need development?
• Are there backup plans to ensure business continuity?

Planning ahead is the best way to prepare your business for the future. If your exit strategy could use some fine-tuning, consider enlisting the help of a local professional or business broker.

Starting a family-owned business provides a unique opportunity to grow closer to your family members and enjoy each other’s successes. Ensure you plan for many successful years to come by consulting with your local Sunbelt Business Brokers office today!