This post is contributed by Jason Dirkham.

Family-owned businesses are the bedrock of the American economy. According to Score, out of the 28 million small businesses in the country, 19% of them are family-owned. A family-owned business is one that is operated by two or more persons of the same family, where the majority of ownership and control lies with the family. There are several benefits to running this business style, such as authenticity and trust, decreased costs and expenditures, and flexibility and versatility. However, running a family business can be challenging as the wrong decisions can lead to its quick demise, marking the end of a legacy. Therefore, it is vital to take the right steps to ensure your family business is a success. On that note, here are vital and practical tips to consider to ensure you run a successful family-owned business. 

Communicate effectively

A key aspect of the success of a business is the effectiveness of its communication. When running a family business, communication is even more essential. Through effective communication, each team member can perform their roles efficiently. It also increases productivity as time is not wasted trying to understand instructions. Moreover, communication is vital as it also gives you an idea of how the team feels about the business. The truth is, your family would run the business one day without you. Through open and transparent communication, you can better understand their plans for the business and ways they think it can improve. It is important to remember that to ensure effective communication, you put in place measures to encourage it. For example, hold regular meetings for team members to communicate their suggestions, challenges, and opinions without fear. You also encourage effective communication by actively listening to them and implementing, fixing, or discussing the issues raised. Effective communication puts you all on the same page and increases morale. Be sure to communicate pressing issues such as the business’s vision, mission, objectives, and staff expectations to ensure everyone is on the same page.

 Keep it formal

As a family business, you may think keeping verbal agreements and plans is fine. However, this could be doing your business more harm than good. According to experts, it is advisable to keep everything formal regarding the business. This means keeping all agreements, discussions, plans, and so on documented in writing and filed. The truth is, although you value and trust your family, various issues and arguments may arise. In that case, you may need to consult the agreements and plans previously discussed. If these are not documented, you will be unable to do so, causing further issues. Understandably, taking the step to document and keep business operations formal may be misconstrued as a form of distrust—a common reason why several family businesses do not do this. However, keeping it formal would go a long way to ensuring your success.

Establish clear roles and responsibilities 

Although you’re a family, each member would have differing areas they are great at, have more experience in, or are qualified for. Knowing this is vital to the success of the business. Therefore, it is important to ensure that you establish the roles and responsibilities of the team. There are several ways this can benefit your business and ensure its success. By establishing the roles and responsibilities of your family, you prevent confusion and conflict, as everyone is aware of what is expected of them. It also prevents low productivity and efficiency as everyone performs in a role they can best perform. ​​For example, if you have an accountant in the family, they can effectively and efficiently manage the business’s finances than if they were in charge of marketing. Additionally, clearly defining roles and responsibilities fosters teamwork as each family member feels they belong and ensures they are all on the same page.

Have succession plan

Whether you’re no more or go on retire, one day you are going to leave the business behind. When that inevitable day comes, who will continue running your legacy? This a harrowing situation most family business owners fail to prioritize, causing the eventual collapse of a once successful business. Therefore, it is important to implement a succession plan well before this period. You must consider some important factors to ensure your succession plan is effective. For instance, the plan should indicate how ownership would be passed down to the successor. Additionally, you must remember that your decision is for the good of the business and its operations; therefore, you must select wisely. It can help to have an insurance plan in place that covers costs in the event of your death. Family insurance is ideal in this instance and PHP agency reviews is the perfect place to get the information you need.

You also need a reputable probate lawyer. Probate is the legal process of administering the estate of a deceased person. As your business is a part of your estate, be sure to engage with reputable names such as Ryan Hodges, probate attorney, to offer assistance during the probate process, ensure you receive valuable advice, and create and implement an effective succession plan. 

Hire outside the family

Keeping it “within the family” may seem like the best idea. However, it is not always practical. As your business grows, its demands and needs increase. This could bring about the need for more staff and specific qualifications. In that case, you would need to hire outside the family. It is important to be subjective on this matter. Explain to your family the need to hire other persons for the success of the business. The last thing you would want to do is lose out on your business reaching its full potential simply because you didn’t hire the needed staff when necessary. However, before hiring staff, you must ensure that your business is in a good financial position to fund the process and pay the accepted candidates. You should also evaluate the available vacancies and needed skills to make the business visible to the preferred candidates. Although these employees may not be related, it is important that you also treat them like family. Doing this makes them feel included, increasing productivity, efficiency, morale, and employee satisfaction.

Make it optional

Another vital aspect to consider when running a family business is to make joining the business optional. Several business owners miss this vital point, which has put several businesses at risk of demise. Although you would love for your entire family to join hands and get the business up and running, this may not be ideal for all of them. You mustn’t force or guilt trip your family to join the business. Inasmuch as the business is family-owned, several members may have differing interests and career paths. For a business to be successful, it needs passionate employees who care about what they do and enjoy doing it. Forcing your family to join would make them bitter and unhappy within the business, preventing you from gaining from their very best. Therefore, give them the option to join and keep it optional for those who aren’t interested yet in case they change their mind later.

Offer training opportunities 

In today’s overly competitive business environment, things are rapidly changing. From new technology to improved strategies, there are several elements your business must be acquainted with to ensure its success. Additionally, as your business grows, its operations become more complex, requiring specific skills to effectively handle the changes. This is why you need to offer your team members training opportunities. You need to invest in training and developmental opportunities for several reasons. For one, it increases employee performance. The acquisition of new skills makes it easier for your family to perform various tasks and to do so adequately. It also expands knowledge sharing, boosts employee satisfaction, reduces turnover, and gives the business a competitive advantage. You should also consider providing mentorship opportunities to your family to help them better appreciate the business and what it stands for. Such mentorship programs also give them valuable skills that may be useful if they run the business someday.

Set boundaries

One aspect that is easier said than done but vital is separating your family life from the business. This is even more important if you want a successful business and family life.  Imagine arguing with your spouse at home and being unable to communicate effectively at work because of the argument. It is safe to say that your business would suffer greatly from this. Fortunately, you can avoid this by clearly drawing a line between your business and family life. One way of doing this is by organizing your family life. Be sure that, like in the business, roles are properly defined within the home to ensure that it doesn’t conflict with business operations. At work, do not address family issues. Keep things strictly professional and only about business. Likewise, when at home, avoid discussions about work and keep the stresses of the workplace away from your time with family. A common reason why it can be difficult to draw the line between business and family life is that you and your family barely have time together. Therefore, time at the business is taken as a time to bond. Therefore, to properly set the boundary, make time outside the business to engage in family activities such as going on vacation, spending weekends away from the business, and other fun activities.