Do you own a small family business and you need ideas to run and grow the business? If YES, here are 20 tips on how to manage a family business successfully.
There are family businesses all over the world that have been consistent over the years and this is as a result of good and effective management. It is often said that success doesn’t just happen; you must make it happen if you desire it.
If your desire is to run a successful family business and leave a lasting legacy for your family, then you must be deliberate about it. If you research about family businesses that grew from the scratch to become a business empire, you would realize that the founders have certain common attributes.
Good management is the bedrock of the success of a family business and a successful family business is any business that involves the participation of all stakeholders (family members). It could be active or passive participation, but the major decision making is done by family members. As a matter of fact, the bulk of the shares of the company are reserved for only the family members.
The joy of any entrepreneur is to build a successful business, hand over the business to his or her family members and after retirement look back to see the business grow in leaps and bounds. If as an entrepreneur, you can get your family members to buy into your business vision, and get them committed to it through hard work, you would realize that you have been able to build a successful business.
Building a successful family business doesn’t happen overnight, it takes years of team work, dedication, commitment to a common goal and unbreakable unity.
If indeed you want to effectively manage a family business successfully, then these 20 tips will help you achieve your goal;
20 Sure Tips on How to Manage a Family Business Successfully
- Enforce Discipline
The essence of managing a business is to ensure every employee carries out their job functions as stipulated in the employee’s handbook. One of the major challenges of building a successful family business is lack of discipline. You would realize that when discipline is not enforced at the early stage of building a family business, the family members that are involved in the day to day running of the business tend to handle assigned tasks with levity because they know that they would be fired.
In order to effectively manage your family business, when any of your staff including your family members breach company’s policies or display any form of indiscipline, if you have to issue them a query, suspension or even a termination of their appointment, do it.
- Impose Team Spirit
Another effective management tip that you need to adopt if you want to effectively manage your family business is to impose team spirit amongst all the employee; every member of the workforce should be able to work as one. The acronym TEAM (Together Everyone Achieves More) truly fits into the basic requirement for effectively managing a family business successfully.
The fact that it is a family business means that you as the leader mightn’t be the only one calling the shots; you would require the input of other members of your family. Make sure you encourage any activity that will promote team spirit in your family business.
- Never Compromise Excellence
One major tip you need if indeed you want to manage your family business successfully is never compromise excellence at any stage of your business. Excellence in terms of services and products is what will keep your family business growing. People are always willing to pay premium for excellence, so whatever line of business you are involved in, please make sure it is a business that produces quality products and renders quality services.
- Enforce Accountability Across Board
As a good manager, one of the things that is expected from you is accountability both from your boss and your subordinates. Since you might be working basically with your family members in running your business, make it clear that everybody including you as the head of the business is expected to be accountable to the whole team. Nobody should be expected to do things and just get away with it. If any employee is running late to work or won’t be able to make it to work, they should make it a point of duty to call their supervisor or manager and inform him/her on time.
- Invest in Education and Training
If your employees are well-trained and educated, you are likely going to struggle less when it comes to managing them. The dynamics of running a business keeps evolving with time and it takes a person that invests in training and re-training to be able to catch-up. If you desire to manage your family business successfully, then you should be willing to spend money in training and educating your employees and family members.
- Enforce Saving Culture
Another effective management technique that you would need to manage your family business is to enforce saving culture. Let it be clear from the beginning that a certain percentage of the profit you make from your business monthly is saved.
If you do this, you will be able to prepare the mind of your family members to know the limit of financial request they can make. Enforcing saving culture in your family business positions your family to cash in on other investment opportunities when they come.
- Adopt Effective Succession Plans
Adopting effective succession plans is yet another good technique you would need if indeed you want to manage a family business successfully. Truly a well – managed family business is a business its leadership can be passed across from one generation to another.
You will need to adopt an effective succession plan so as to be able to pass across the leadership of your business to your children and then from your children to your grandchildren; that is the hallmark of managing your family business successfully.
- Hire Qualified Workers
Another tip you would need if indeed you want to manage a family business successfully is to ensure that you hire qualified workers. The truth is that if you have qualified employees manning various positions in your company, you will find it easier to manage them; they will know what is expected of them and how to get things done.
- Adopt International Best Practices
When it comes to management techniques or managing any type of business, there are international best practices to follow. So, if you want to effectively manage your family business, then you must ensure that you adopt international best practices as it relates to your line of business or industry. You can always review journals or publications that will bring you up to speed.
- Establish a Training School
You will realize that most successful corporations would not assign a duty post to a new employee unless the employee passes through their training school. So, if you want to effectively manage your family business, then you should ensure that you establish a training school where you hatch your workforce to be able to conform to your organization’s corporate culture. This management technique is applicable to well – established family businesses; organizations with the capacity to employ over a dozen employees per time.
- Operate Open Door Policy
Another tip that you need to adopt if indeed you want to effectively manage your family business successfully is to operate an open door policy; you should keep your doors open for suggestions from members of your team and your clients.
With that in place, you will be able to get suggestions that will help you manage your family business effectively. Please note that you are not expected to use all the suggestions that you receive. What is expected from you is to screen and vet the suggestions that you get and only make use of the ones that suits your business or style of management.
- Attend Related Refresher Courses
To be on the top of your game in terms of successfully managing your family business, you should be able to attend refresher courses on management. This would, to a very large extent expose you to things you need to do to effectively manage your family business and things you need to avoid. When you surf online, you would get information on available management seminars and short courses organized by top Business/management Schools.
- When the Need Arise, Hire Expatriates/Consultants
Although it might be expensive hiring expatriates or consultants to help you run your business, but when the need arises, it is will do your family business a whole lot of good. The truth is that in order to effectively manage your family business, you would at a point in the life-cycle of the business bring in expatriates or consultants to help you run the business. It is one easiest ways to put excellent touches in running your family business.
- Reward Excellence
If you want to get people to carry out assigned tasks with open heart and attention to detail, ensure that you reward excellence; it is one management tip that you would need to adopt if you want to manage your family business successfully.
Rewarding excellence might not be massive and expensive. It could be recognizing an employee, celebrating an employee or giving out tokens in form of appreciation to an employee that go the extra mile to get things done for the organization.
- Have Regular Meetings with Your Workers
Having regular meetings with your workers is yet another tip you would need if you want to effectively manage your family business. Part of what you need to do is to ensure that you create time for office meetings; a time where challenges, feedbacks, projections and relevant issues are discussed. The meetings could be daily, once in a week, twice a week or once in a month. The bottom line is that there should be consistent meetings in your organization.
- Craft a Clear – Cut Vision Statement
You will agree that no one can effectively manage what is not clearly defined. In essence, one of the tips that you would need if you want to effectively manage your family business is to craft a clear – cut vision statement for the business.
Crafting a clear – cut vision statement for your family business and ensuring that your family members and all your employees buy into it is the basic foundation you need to manage your family business successfully. Just make sure the vision is not just written and placed in strategic places in your office, but let it be in the hearts of all your family members and employees alike.
- Work with a Common Goal
Ensuring that every member of your workforce works with a common goal is yet another effective management technique that you need to adopt if you want to successfully run your family business. As the manager and leader of your family business, you should work together with your family members to set a common goal for your family business if indeed you want it to succeed.
Just ensure that the goal you set is easy to understand and interpret. For instance, you could set a goal to become the leading player in your line of business, or to build a multi – million dollars business dynasty in the next 20 years. The rule of thumb here is to set a goal that is measurable, achievable, realistic and time based.
- Set Annual Corporate Goals
Another management tip you would need to effectively manage your family business is to ensure that you always set annual corporate goals for the organization. Since the essence of effectively managing your family business is to ensure that the business is growing, the best thing to do is to set annual corporate goals of the percentage increase that you expect from your business.
Setting corporate goals for your organization would help motivate you and your workers to put in all the effort and expertise required to make it grow. For instance; you could set a benchmark for the increase you expect from a particular target. The truth is that effectively managing your family business requires that you sometimes take drastic decisions so that you can safe guard the future of your company and of course your investment.
- Review Your Management Style Annually
Reviewing your management style annually is yet another tip you would need to manage your family business successfully. The truth is that no matter the management style that you adopt, it is highly important to at least review the method to see how effective it is, and if it indeed suits your personality et al.
Part of what you need to do is to go on a retreat with some of your key management staff and then critically examine your management methods to know how far it is faring and if indeed you need to continue with the method or opt for another management method.
- Put Systems and Process in Place That Make Your Business Run on Autopilot
It is now trendy to find corporate organizations and even businesses running on autopilot. When a business runs on autopilot, it means that the business needs little or no supervision in other to achieve results. But before you can attain this height, you would need to deliberately document all the processes involved in producing your organization’s products or carrying out services as requested by your clients.
As a matter of fact, there might be need to hire experts to help you put system and processes in place that will make your business run on autopilot. The truth is that running a business on autopilot is one of the best tips when it comes to managing a family business successfully.
In conclusion, no business survives if effective management systems are not put in place. The above management tips can be adopted by anyone who is managing a family business no matter the industry that your business belongs to. These are tips that have been proven to deliver excellent results year in year out and it can work for you as well.