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Family companies are a staple of the American economy. According to the Family Business Institute, family businesses account for more than half of the private sector workforce and generate two-thirds of all new jobs. Clearly, there is something special about these businesses that allow them to thrive in a competitive environment. Here are six tips to help you set up a successful family company
1. Limited partnerships
When establishing a family business, consider setting up a limited partnership structure to protect the interests of all involved parties. This type of arrangement allows one or more members to become active participants in the company while reducing their liability should things go wrong. Additionally, Limited Partnerships can be used as a Family Trust, allowing business assets to be passed down without probate. If you plan to set up this type of business structure, consult a legal expert to ensure that you are following all applicable state laws. While the partnership structure does offer some legal protection, it is important to understand the implications of setting up this type of business.
2. Establish a family mission
Having a clear mission statement will provide your family-run business with direction and focus. It is also important to develop a written set of values for the company, as these will ensure that all employees are on the same page when it comes to how the company should operate. With this type of structure in place, you can establish expectations for everyone involved and hold each other accountable for meeting those expectations. Also, by establishing a mission statement, you’ll be able to explain the company’s purpose and goals to potential investors. It’s also important to make sure that the mission statement reflects your company’s values.
3. Develop a succession plan
One of the most important aspects of setting up a successful family business is having an effective succession plan in place. This should include determining who will become the next leader of the company, as well as providing training opportunities for future generations. Having an established succession plan allows you to plan ahead so that you can ensure the continued success of your business long after you and your family are no longer involved. It’s also important to discuss the future of the family business with all family members involved and make sure that each person is aware of their role in the company’s future.
4. Create a family council
Creating a family council can be beneficial for both the business and the family. This type of organization allows members to voice their opinions, provide feedback, and provide a forum for the resolution of any conflicts that may arise. Any decisions made by the council should be documented in writing so that everyone involved has an understanding of what was discussed and agreed upon. Additionally, this will help keep lines of communication open between all family members involved. It’s important to remember that the family council should not be used as a substitute for professional advice and legal counsel.
5. Establish roles and responsibilities
Having clearly defined roles and responsibilities is important when setting up a successful family business. Each member should know exactly what their role is within the company, as well as what is expected of them on a daily basis. This will ensure that each individual understands how their actions affect the overall success of the business. Additionally, you should document all roles and responsibilities in writing to ensure that everyone is on the same page. It’s also important to review and adjust roles as needed to ensure that everyone is working together towards the same goal.
6. Invest in your business
Finally, when setting up a successful family business, it is important to invest in the company. This could include investing money in marketing or hiring professional services such as accountants or lawyers. You might even need to take out a loan to help with expenses and to get your business started off on the right path to success. There are several loan options to choose from including a sba 7a loan. Investing in your business will ensure that you are able to grow and expand over time, increasing your chances of success. Additionally, by investing in the business, you can create a more secure future for all family members involved. While investing in the business may cost more upfront, it can provide long-term benefits for everyone.
By following these tips, you can increase your chances of setting up a successful family company. While there are many elements that go into running a successful business, having a plan in place will provide you with structure and direction to help guide your efforts. By taking the time to establish roles, develop mission statements and succession plans, and invest in the business, you can help ensure that your family company is able to thrive for generations to come.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect those of Geek Vibes Nation.
Amanda Lancaster is a PR manager who works with 1resumewritingservice. She is also known as a content creator. Amanda has been providing resume writing services since 2014.