Here’s What You Need to Know About Running a Family Business.
Are you wondering what the secret is to running a successful family business? Here’s everything you need to know!
It is challenging running a family business successfully. After 84 years in business, the Sashco family knows what it takes to succeed!
Here’s what Les Burch said when we asked him, “Les, if you could only give one piece of advice to someone running a family business, what would it be?”
What We’ve Done Well.
We have made mistakes over the years for sure, but we have done at least one thing right and it was intentional. You should never hire family members should solely because they are family. This is the one of the most common mistakes family businesses make. It’s a natural mistake because inherent in the concept of ‘family business’ is the fact that several family members work in the business, through many generations.
Nothing can hold a family business back more than a family member, especially in a key position, who is not suited well for their job. They cause discouragement among other employees and sometimes the loss of good ones.
Give “The Speech.”
Before you ever hire your first family member, set clear ground rules. Here’s the speech — “Because you are family, we’d love to have you work here, but we aren’t pressuring you to do so. We will only hire you if you fit the job. Like anyone else, you must have the talent and skills needed to fulfill the position. You will go through our formal interview and decision process. If you get this job, you will know we would hire you even if you weren’t a family member. We won’t put you in a position just because you are family and rob you of knowing you are a respected contributor to our team.
You will receive our regular market wage and start at a scale commensurate with your experience and performance. And, you will be on the same bonus and incentive programs as our other company members. Because you may also be a part-owner of this company, we want you to understand that ownership and job duties are separate concepts with distinct reasons for income.
Owners get distributions, and employees get wages — don’t confuse them. If you are an owner and we declare a distribution, you will get that whether you are employed here or not. If you get a distribution and are also an employee, it won’t subtract anything from your regular wages or bonus.”
The crucial “Bs.”
Family businesses are often put in a bind because family members expect to get awarded positions and income just because they are family. Doing this hurts the enterprise and, ultimately, all the family members. With missed opportunities and when profits decline, the business suffers.
Be fair, be intentional, be a business at work and a family at home. This advice will help protect your business and your relationships.
Would you like to learn more about us? Check out What’s Up With Sashco?.