Starting a family business is a great way to generate extra income for the family. However, the process can be overwhelming, especially when no family member has ideas about where to start or how to go about the entire process. Below are tips to help you start a family-owned business.
Determine the Type of Business You Want
When it comes to choosing a family business, everyone might have different ideas. Start by asking each member their views. You can choose a carpet cleaning business, plumbing, or electrical services. Ensure you get everyone involved.
The final decision depends on the skillset among the family members. Ensure you go for a business that everyone can contribute to without struggling. If one family member has better skills than others, they can offer training to make each person comfortable and resourceful.
Create a Business Plan
Once you decide what you want to do, plan how you’re going to do it. In this case, you will need to create a business plan to guide you. Decide how much capital you want to invest, the business location, whether online or physical, the age and sex of your target audience, among other demographics. Below are other areas to consider.
- Define each family member’s role, including schedules when everyone needs to be fully involved in the operations.
- Compensation packages for each member depending on the profits generated. Be open with the compensation structure.
- Schedules when each family member can take annual leave. Ensure each person is comfortable with the assigned dates.
- Define the exit plan for each family member by setting conditions that each should follow before leaving the business.
- Create a succession plan showing business transition should the founders retire, pass on or pass along the business for another opportunity.
Remember, your plan should be on paper to avoid confusion in the future. Ensure everyone agrees and commits to the assigned responsibilities
Set the Ground Rules
Laying down rules will help you create the company culture and set a firm ground for the business. This increases the like hood of running the business smoothly and professionally. Below are some of the ground rules you can set for the business.
- Each family member should keep their personal and work lives separate. Let work issues be solved at work professionally.
- If you have teens who want to join the family business, they should gain experience first from other organizations.
- Get help from professionals who have experience in the same industry. Family members may not be experts in everything.
- The business management or shareholders should treat everyone equally, whether a child, cousin, nephew, sister, or brother.
- Create measures to mitigate potential losses. In this case, you may want to set aside emergency money to take care of future risks.
Put In Your Best
Stay encouraged, especially during the first days or months after the launch when things are often challenging. This is the time when all family members need to hold each other’s hands and put minds together to ensure the business moves on to the next level. It may not be easy but giving up is not the solution.