Family Owned Business – Defining Family
- The Nuclear Family
- Shared Interests
Click To TweetThis is why the definition of “family” is important. The nuclear family is an effective way to set the boundaries of who has interest and who does not. Shared interests is another effective way to set the boundaries of who has influence in a family business. Sharing a parent with a sibling does not automatically entitle that person to influence in business operations. Shared interests means shared benefit and shared risk. Conflict often occurs when one sibling puts in ten years of hard work and the other shows up in the last six months to claim the fruits of the labor. The wise solution is to measure benefit against the risk and output of each family member. The sphere of influence of each participating family member is an effective way to measure a person’s membership into the family’s small business. Remember that the family exists for the benefit, not only to drain the business resources for personal gain. An effective method for measuring an individual’s control is to measure his influence. Consider what benefit the member brings to the success of the business. The family member may be a distant relative but he may also be a gifted accountant or lawyer which the family business desperately needs.
Click To TweetFinally, regardless of how you define family, the family unit and the business must coexist. If either one fails, the other will fail too. Remember that most small businesses fail in the first five years. Most partnerships also fail. These facts make the family small business twice as challenging. It also makes success that much sweeter. For more excellent guidance on success in small business, check my favorite top 3 sources: