A silver lining just may have risen from the dust of a difficult economic climate. People are once again discovering that enlisting the talents of their parents, spouses, siblings and children is a good family business decision.
After all, we already know our relatives’ backgrounds and communication skills, and are familiar with their strengths and weaknesses. Conversely, hiring a new worker is taking a chance that your interview and their resume – which really seemed a good fit at the time – didn’t reveal enough about them.
Avoiding Pitfalls of Family Conflict
At times a family business can present challenges because of the inherent stress on close knit relationships. On the flip side, the trust and reliability family ownership provides can far exceed any negatives, as long as the structure and responsibilities are clearly defined.
For starters, it’s critical to have an appropriate shared ownership agreement drawn up by a solicitor knowledgeable in business partnership law. A company’s articles of association would include significant clauses, and a family trust might be an ideal place to secure shares. Building a family legacy is a noble goal, and a properly-defined right of succession is another key element to smooth transition.
Tips for Family Business Success
We’ve put together several tips which consistently rose to the surface, after scouring the web for both mishaps and success stories of existing and well-managed family business.
- Choose a location with close proximity to potential clients and customers.
- Invest in professional development to improve your family’s management skills.
- Try to give each member of the family an area in which they can specialise.
- Family ownership is a credible commodity; emphasize it in your marketing.
- If you don’t take care of the business, it can’t take care of the family.
- Offer attentive and personal service; be committed to your consumers.
- Stay relevant by responding to social changes and market gaps.
- Don’t hesitate to try new and innovative methods of operation.
- Set the same standards for family workers as you do for employees.
- Provide clear lines of supervision; not every family member should be a boss.
- Draw up specific responsibilities and duties for each family member.
- Show respect; do not disparage family in front of employees.
One example of UK’s oldest family businesses which have survived for almost 500 years is the Durtnell and Sons construction company (of Brasted, Kent) that has managed to stay afloat since the reign of Elizabeth I.
According to an Oxford study on UK family businesses policymakers and government would do well to more actively support the rise of the UK family business; recognizing the strategic importance family ownership will bring to a modern economy.
Finally, the study’s table of family business by sector, shows that the majority are involved in real estate, construction, transport, storage, and communication categories.
If you have any legal query regarding this, Linkilaw’s here to answer your questions! Book a consultation with our legal team and we’ll help you!