Starting a family business can often seem like a good idea. After all, there is no one you trust more than your family. Plus, people seem to like family run companies; it creates a sense of trust within customers too. While family businesses can be some of the most successful, they are not without their own unique challenges. With that being said, continue reading to discover some top tips on running a successful family company.
Hire a chartered accountant – First and foremost, it is always a good idea to let a neutral professional handle your finances. This will ensure that there is always an unbiased individual that is acting in the best interests of the company when it comes to the monetary side of things. It goes without saying that money can be one of the biggest sources of friction in any type of relationship, let alone a business, which is why hiring an accountant for any family run business is a must. They can also alert you to tax reliefs and opportunities like this. Check out https://creativetax.io/ for more information.
Set aside business time and family time – It is vital to try and keep business and family separate. When you are at work, you should focus on business and do not bring family matters into it. Nonetheless, it is just as important to designate time to focusing on your family. For example, at family events or on a weekend, you should make a rule that you do not talk about business or deal with business matters. Believe it or not, but this is actually vital for the health of your company not just family relations.
Don’t let family relationships determine punishment or reward – Rewards and punishments should not be relative to your personal history with the person. You need to have the same approach in place for all employees.
Draw up a written agreement – This does not signal a lack of trust. Rather, it is a sensible move. You should draw up a formal agreement to ensure that there is the backbone for a strong business relationship. The bottom line is that everyone disagrees from time to time, no matter how good their relationship is. This is why you should have a written agreement to protect all parties that are involved.
Don’t put non-working family members on the payroll – We all want to look out for our family members, and thus it can be tempting to put them on the payroll to give them a helping hand. However, you need to ensure that only those that contribute to the business are on the payroll, and that means a real contribution. Everyone should have a job function, title, and compensation. Family employees should not be immune from performance reviews either. If you don’t put them in payroll then there are chances of 1099 form for extra income tax. If you don’t know what is a 1099 form, then try checking about it online.
Communication effectively – Communication is the key to success in any business, and even more so when it comes to family run companies. This is because we often have a tendency to assume that our loved ones know us so well that we do not need to say when something is on our mind. This is not the case. You need to make an effort to express whatever you are feeling otherwise things can get very complicated quickly.