Every family owned and operated business has a unique layer of challenges that are different from a “non-family based business”.
Whether your business is a large-scale corporation, a region-wide chain, or has more of a “mom and pop” feel, having a Family Business Council can help your business and family.
We know that family can be tough sometimes. And running a business is hard, too. When you combine the two, at times it can be deadly. A Family Business Council means that you’re not running your business like a family – you’re running it like a business.
You probably already have a board of directors, and they probably communicate pretty well with upper management. And that’s great! But occasionally there are things that slip through the cracks in a family business, and they can be extremely damaging – to your business, or worse yet, to your family.
Some issues you may face in your business with which a Family Business Council can help may be:
Unclear Communication
Because you see your family every single day, and you have for your (or their) entire life, it can be so easy to assume that they know something. Or maybe you thought you told them, but you forgot. Instances of unclear communication can drive a wedge in the operations of the business, and offend someone. We’ve all heard the younger sister say “no one ever tells me anything!” and we don’t want that to be characteristic of your business.
Official Roles
When you formed your business and you decided to assign roles or employ family members, surely you considered their skill sets. But in many cases, those skill sets require roles to be assigned with no concern for who is the oldest or youngest or related closest to the founder(s). Susie might be giving direction to her sister who is ten years her elder. If that doesn’t give at least one of them high blood pressure, probably nothing will. Roles need to be clearly written and observed to avoid high tension issues in the workplace, and to make sure work is done well and on time.
Policy Development
Just like any other business, you have to have policies for vacation time, overtime, salary ranges, health benefits, retirement savings, and even workplace conduct. Making decisions on these matters for individuals you haven’t met yet is one thing, but making them for people you love more than anyone else in the world can suddenly turn something from objective to subjective in the length of time it takes to mention your goofy uncle’s name.
Core Values
Drafting vision, mission, and values statements is not a simple undertaking. Advisement from an objective individual can make all the difference in the world as you work through these critical elements of your business identity.
Representation and Organization
As your business and your family grow, it is wise to ensure that the family is adequately represented to the board of directors. Your Family Business Council meeting minutes will be able to make clear recommendations when it comes to electing new board members, offering input to board discussion items, and proposing changes to anything official in the business.
Retirement Succession
When it comes time for the founders to prepare for retirement, steps should be laid out for delegation of responsibilities and adjustment of roles within the rest of the family. This will be one of the biggest decisions the Family Business Council will make, and having someone objective to help walk through the many nuances of this process will make certain that the transition is smooth, and that business and family relationships are held strong throughout.
Are you ready to weigh the options and see if your business is ready for its own Family Business Council? We are skilled in this area and can help you determine if you need one and how to get it started. We can be that objective voice as you plan and prepare for the future of your family business! Give us a call or an email if you have any questions, and check back next week for more information on getting a Family Business Council started.