It’s alright, if you do not know how to start a family business, the desire to get a family business is very enormous. Families brainstorming and looking for news means of making money and sustaining the family.
This desire to have a legacy and something running for future generations is very attractive, you also want to hire trusted family members into your work space to empower them, you also get to hire your children in order for them to gain the experience.
Indeed, knowing how to start a family business is a great means of improving your family’s source of livelihood and also reducing dependency on a particular person. Before venturing this bold dream of having a family business there are some key factors you must tale not of and they as follows;
DRAFTING A BUSINESS PLAN
You do not want to start a family business without a plan, that would be the wrong thing to do. The actual failure and bankruptcy begins when you fail to come up with an actual business plan. To begin a business you must have these in place: getting a legal authority, registering your business name, and getting a tax adviser who will be part of the business plan development process.
Your business plan must be written and shared amongst the above listed to avoid complaints and to make known to everyone your objectives. People like to be carried along and to have them in your team means that to some extent you trust them to make them a part of a life changing goal. Keep them abreast of your plans and activities related to the family business.
Your written plans to be issued to them should contain these:
* Specific Roles – Every member of your family should have a role to play in growing the family business, details of what they are expected to do should also be written and also ensure that everyone being brought into the business respects the policy of the forerunners.
* Ownership Stakes – Before starting the business read out the ownership stakes to each member of the family involved in the business, this is always where issues rise from. You should be able to tell them whether they would be paid a salary and how they are to be paid. Note down the percentage each member is entitled to get upon the sale of the company. Also inform them about the voting rights. So you see that there is more to opening a family business, raising the funds to begin the business isn’t the key but setting up a workable plan.
* Who succeeds? Knowing who takes over the business is very important, so everyone is cleared on this, to avoid arguments and war amongst family members and for the court to easily decide when it gets to them. Determine who takes over, this can also help you save the business because you are able to identify the best person for the position. Remember that retirement is unavoidable so put everything in place.
* Exiting the business– You must also put down the conditions for leaving and when someone willing decides to leave the family business and this person has contributed immensely to the growth and development of the business you must say what reward they are entitled to, you must have all these in place to be able to start a family business. Complications will always come but can they be avoided? Yes they can! Get a plan!
GROUND RULES FOR THE FAMILY BUSINESS
Familiarity they say breeds contempt, there is a slim chance of not messing up the family business by over familiarizing. In order to have a business that takes away pleasure from the workplace, not to say people can’t have fun at work but to not allow any family member to mess up the business because they are family.
Be strict, you have to set up rules to future the organisation before you start the family business so every member of the family is aware of them. They should be clarified about work and family and should always ensure to separate both.
No family member should feel entitled to always get a job from the family when they need it, if one isn’t good enough the person should be trained but not given a job to start doing the will flop. The success of the family business should be of great priority. Set the rules yourself, you already understand your family members. It makes it easier to decide when you know their abilities.
