A Guide to Setting Up Your First Family Business Together

A Guide to Setting Up Your First Family Business Together

Setting up a family business can be a great way of controlling your finances and of working with the people that you love best. However, setting up a family business is not always plain sailing. There are many challenges, from both internal and external sources, that you need to combat in order to allow your company to thrive for generations to come.

Consider Living On-Site

From agriculture to retail, many families decide that they are going to live on-site. Although you might worry about being unable to escape from the pressures of your company and struggle to find downtime, there are also a number of advantages. For instance, you will no longer have to commute to work, and you can move back and forth easily between family and work life. In order to prepare your property for your business, you should consider building solid long lasting industrial buildings on site that will give you the storage capacity that you need. This especially the case if you are planning to run a farm off your land. 

Split Responsibilities 

When you are setting up a family business, it can be difficult to delegate the working duties between every family member, and one person can often be left with the bulk of the responsibility. To make sure that this is split evenly, you should cater to each person’s talents. Then create a strict schedule and job outline that can help everyone to know what their duties are. You should also create a clear leadership structure to prevent any confrontation over who is at the top of your business’s rungs. 

Stay Professional 

As a family business, it can be easy to fall into the habits that you have at home and lack the professionalism that you need to be taken seriously as a business. Therefore, you should keep your personal life and problems away from the business. Create clear policies for your company, such as pricing structures. You should also make sure that there is no bias toward certain customers or employees, and that you dress the part if you are in public-facing roles, however much you may be tempted to lounge around in joggers in your own home. 

Get Exterior Advice

Even if your family members all hark from the business world, it is important that you are able to get impartial business advice from an external source rather than from a distant uncle or aunt. This will allow you to make sound business decisions that are uninfluenced by family power dynamics or that may be less effective than those you will pay out for from a consultant or advisor. 

Manage Your Finances

Separating your personal and business finances can be difficult when you have a family business. However, you can overcome this by creating different bank accounts. Start by paying yourself and your family members a certain wage each month. Then you should begin using a financial tracking app to automatically manage your profits and expenses.

Plan Your Succession

When you have a family business, you will want it to continue to thrive for generations to come. However, the only way that you are able to do that is if you plan your succession effectively. This means that you should create a legal will, that you train family members to take over your role before you retire, and that you make a step-by-step outline for how you will pass on your business in the future.