Best Practices

In a family-owned business it is best practice to separate business from pleasure

Your family will continue to get together at the dinner table and on holidays and events, therefore it is essential to keep business problems in the workplace. You don’t want emotional or financial challenges crossing over to either side.

It can be challenging enough to make business decisions and operate without bringing personal feelings into the mix.

SUGGESTIONS:

• Family Meetings - Having family meetings on a regular basis can help to keep those lines from blurring and will contribute to transparency in the business.

• Set Boundaries - Set a boundary that is physical when you are not at work. For example, no shop talk unless you are in a specific room in the house. The family room could be the choice venue where a business-related "meeting" can be called and held. Not only will this make meetings intentional, but it will support the much-required family time and work/life balance we strive for and need.  

• Clear Contracts - Clearly outline what percentage of the business each member owns in a formal signed document. That will ease tensions between members who might feel entitled to a larger share of the business. 

• Set Standards - Make it clear from the start that family members will be held to the same standards as non-relatives (e.g., being timely, working efficiently) and will suffer the same consequences for bad performance (e.g., reprimands, termination).

• Separate Situations - Financially separate out personal and business affairs. Money can cause tension among family members even when they don’t share a business. The best way to avoid financial issues is to set expectations from the outset and communicate with other family member/owners regularly. Establish separate bank accounts and credit cards for the business then for personal use and be diligent which you use for pleasure.