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Running a Profitable Family Business
May 7, 2007
Family businesses tend to act less like businesses and more like families. Perhaps the biggest problem for family businesses is the lack of structure. Who makes decisions regarding the financials? Who handles HR problems? Who purchases the inventory? Even when decisions are made, implementation is often slow, and the costs of indecision are enormous. Below are three secrets, that I’ve found, lead to running a profitable family business:
- Specify roles. Families lack clearly defined roles and responsibilities. Establishing basic guidelines like job descriptions, compensation standards, and objective performance measures is a good way to keep control and avoid mishaps.
- Schedule meetings. Families are emotional and people avoid situations that make them feel anxious. Be sure to schedule regular meetings where the family can communicate openly and honestly using an agenda and reviewing undecided issues while leaving family matters at home.
- Take on outside advisers. Expand the number of people involved in a decision process with an advisory board because new points of view challenge family members to take actions that are best for the business.
When times get tough, which comes first—the family or the business? Avoid the wrong moves and you won’t have to choose.
Posted by Shanu Singh Guliani on May 7, 2007 | Comments (0)
