Defining upfront the assorted rules, expectations and structure unique to a family business is vital for its success. These unique requirements need to be well developed and delineated in the Company Business Plan and continually discussed in periodic family meetings. This way, every family member feels they are vital and contributing to the Strategic Plan and future of the family venture.
Advantages for family members joining a new family venture are numerous:
- Family members can be very helpful during the development period and quite inexpensive to hire.
- Family wants the opportunity to help the business as it benefits the family as a whole.
- Flexible hours, days and pay are attractive to family member initially, using minimum resources.
- The business brings family back together.
- Family members join the family venture because they are frustrated with their current work place and environment.
As a Business Consultant I have seen numerous Issues worth considering for an early stage Family Venture:
- Largely interpersonal issues. Experience role reversals.
- Resentment can build if a family member isn’t adequately challenged and rewarded.
- Issues concerning power, rivalry and jealousy are common between family members.
- Take in consideration a family member’s personal interest, skills, experience and education when assigning areas of responsibility.
- Define, exactly, each family member’s area of responsibility.
- Quite important to specifically define who the family member is accountable, as much as, what the member is accountable for.
- Determine compensation structures- salary, bonus and equity stakes.
- How will a disagreement be handled?
- What will be done if a family is not contributing?
- If a family member wants out, what is the buyout plan and continuation plan?
- Are you going to allow family members to be non-participating, passive investors in the business?
About The Article Author – Frank Goley ~ Business Consultant
Frank Goley is a business consultant, business turnaround consultant, business plan expert, business coach, small business consultant, business planner, marketing consultant, online marketing seo consultant, and business plan consultant for ABC Business Consulting. Frank is considered an expert in writing, developing and implementing business plans, business turnaround plans, funding business plans, marketing plans, strategic plans and web marketing plans. Frank offers comprehensive business consulting, business coaching, business turnaround consulting, along with web seo, web development and web marketing consulting, to small and medium size companies. Frank is the author of a business plan book, The Comprehensive Business Plan Workbook – A Step by Step Guide to Effective Business Planning, and he has over 50 published articles and e-books on business success strategies. He also writes the Business Success Strategies Blog.