By Debbie Gregory.
A family owned business faces unique challenges that other types of businesses do not face. The overly personal nature of family relationships can cause issues with hostility, nepotism, favoritism, and other morale-killing practices but if you are diligent and set (and adhere to) the same standards for all employees, those related or not, you can create an environment that is uniquely fulfilling and diverse. Often Veteran Owned Businesses are a family affair.
The top five challenges for family owned businesses and how to make sure they are not negatively impacting your family owned business:
1.) Company Culture
Make sure that you clearly communicate the company’s values to all employees, both those related and those who are not. If people in the company feel that they are not part of the company’s culture they will not stay with the company very long. It makes sense to be consistent and have the same policies apply to all.
2.) Compensation and Benefits
All compensation and benefits need to be set according to the position in the company and not according to the relationship between the people. If the business is viewed as simply paying a relative for doing little or no work, it can cause serious morale problems among the staff who are not relatives. You have to be careful and make it very clear that everyone at the company is on an equal playing field when it comes to salary and rewards for a job well done. This policy can also protect you from litigation.
3.) Generational Issues
When a company employs multiple generations, it can be a serious boon to the company overall. The younger generation brings fresh ideas, new perspectives, and new technology. However, if the originators of the business are too rigid, they may not listen to the younger employees and those people will feel frustrated or feel that they are not valued and a welcome part of the team. This can lead to low morale. Each generation has something to offer and it is best to be open-minded and actively listen to all ideas presented.
4.) Business and Pleasure
Special problems arise from family members working together. Personal relationships come with conflict and arguments as well as kindness and affection. When at work it is best to keep personal feelings out of business dealings; and vise versa when at home it is best to leave business at work. This is another area where it needs to be made clear to every employee, those related and not, that every single person working for the company will be held to the same standards and the same consequences apply to everyone for breaking rules or poor performance.
5.) Succession Planning
Most family owned business do not survive long enough to be handed off to the next generation. It is best to come up with a solid plan for when the company owners retire or die. This includes who will be the next head of the company and training them for the position well in advance. This is extremely important with Veteran Owned Businesses especially those who obtain the majority of their revenues from government contracts that provide Veteran preferences.
With all the challenges, working in a family owned business can be wonderful, enriching, and wholly satisfying experience for all involved… as long as everyone is treated fairly.
