The emotional, social and economic values of families are simply immeasurable for every single person and society as a whole. So, when family members decide to join their forces and launch a business, it must be an instant success, right? Well, it depends on many factors. This is why we have prepared five rational ways for a family to start and develop a successful small business.
Separate Business and Family Affairs
The most common situation when it comes to families and businesses is that parents borrow money to their children to help them start a business. Moreover, sometimes parents even become part owners of such businesses. However, there has to be a clear line between the business and family relations. When discussing business matters, the fact that you are related should not be too important. It can only contribute to mutual trust. On the other hand, family gatherings and lunches are occasions on which business matters should be left aside. This approach is the first guarantee of a successful family business.
Provide a Plan and Regular Updates
When you want to ask your parents or siblings to support your business ideas through their investments, you have to present them a detailed family business plan. No matter how much they love you, they will not borrow you their savings only because you are their child or sibling.
Also, if they agree to participate in your business (ad)venture, they will expect to be informed on the progress of the business. This is why you have to gather them on a regular basis to update them with the news. In addition, you should listen to their advice. Their experience or knowledge could help you develop a more serious business.
Inheritance in Advance
If your parents have some money or possessions that you know they are going to leave you when they pass away, you could ask them for early inheritance. Actually, more and more parents decide to give their children their inheritance in advance. That money is already meant to be passed to their children, so why wait for the terminal breath if it can help the children make their business dreams come true? Of course, this kind of financial collaboration demands an even higher level of responsibility from those who decide to use such assets to start and run a family business.
Distribute the Roles
As the business is rising, you will soon be facing a demand for more employees. This is where family members included in the business might experience disagreements. The best way to avoid such cracks on the family business façade is to sit down and see what you can do to reorganize the structure of the business. Maybe you could hire more family members, to make the whole thing stay in the family. Just think of Don Vito Corleone and his business philosophy; of course, in your legal field of work. Anyway, if the business demands trained professionals, you should first hire a recruitment agency to hire the appropriate workers for your business.
Ensure Additional Guarantees
When you are in charge of a family business, you have to be ready for unexpected difficulties, both inside the house and on the outside markets. No matter how hard you are working and how much you are trying to keep your head above the water, sometimes you are simply carried away by a large business tsunami. So, you have to build a number of guarantees that will prove that your business has strong foundations in case of economic turmoil. For instance, you could use silver bars as backup for your family business. When the cash market dies down, precious metals are the second best leverage of business stability.
The share of family businesses in the most powerful economy of the world – the US economy – is about 90%. It is clear that such business enterprises are the spine of the global economy. If you want your family business to be productive and efficient, too, you need to commit yourself to it and try to apply our tips to make it as profitable as possible.