Family Business Ten Tips for a successful family business
More than 70 per cent of all businesses in Australia are owned and operated by families, including some of Australia’s most loved brands. These businesses are in the difficult position of mixing business with their personal life, so it’s not surprising that sometimes it can go spectacularly wrong.
The following are Ten Tips to help your family business grow and thrive!
1. Establish a Family Council for the business owning family. This is a group that meets to focus on family expectations of the business. It helps to ensure that the views of all members of the family are heard, and any issues addressed.
2. Create a family charter. Also known as a code of conduct, or constitution, the family charter outlines what is and is not appropriate practices for family members working in the business.
3. Set position descriptions and key performance indicators for all members of staff, including family members. Setting clear roles, responsibilities and measures for each family member will help avoid disputes about performance and remuneration, like any other employee.
4. Establish a succession plan. If succession is planned, documenting the plan will dramatically improve the transition from one generation to the next. Even if handing the business over to the next generation isn’t the plan, developing a plan for what will happen, and sharing it, will help avoid future disputes.
5. Create an entry plan. Hiring a family member for a role they are not qualified for is never a good idea. Create a set of criteria or achievements family members must fulfil before taking a role in the family company. Experience gained from outside businesses can equip a family member with valuable insights.
6. Ensure there is a will or estate plan. It may be difficult, but always prepare for the worst. Outline how the family estate will be divided should something unexpected happen; it will help avoid bitter disputes between siblings.
7. Be proactive to resolve disputes. Don’t hesitate to establish a process or engage outside help should business and family relationships start to sour. If you wait too long, both the business and the family relationships suffer.
8. If your business has a formal Board appoint one or more independent non-executive directors. Independent non-executives bring outside experience and perspectives to the board, and can fill skill gaps in the family.
9. Avoid the courts at all costs. Try and settle disputes before they reach the point of needing legal counsel. The very nature of the court system is adversarial, pitting one family member against the other. It almost always damages the family relationship and has negative impacts on the business.
10. Leverage your family business status in your marketing and branding. The 2019 Edelman Trust Barometer highlighted that 75% of consumers globally trust family businesses over non family businesses. The same report highlighted that only 52% of consumers were aware of ownership of businesses they buy from. Using the “A family owned Australian business” emblem in your marketing, packaging etc is the easiest way to highlight your status as a family owned business to Australian consumers.
Family Business Australia (FBA) purpose is to help family businesses succeed. They do this by assisting family businesses harness their unique competitive advantage. Leveraging ‘family business’ as an asset is what truly sets our members apart from their competition and FBA has been successfully helping family business along that path for the past 20 years!
Find out more at familybusiness.org.au or call their Membership Team on 1800 249 357 or email firstname.lastname@example.org