Going into business with family often stems from the best intentions, implicit trust and the communal desire for maintaining a sense of security and preservation that comes with being ‘blood’.

That being said, every family situation is dynamic and fluid and evolves along with the business. At the best of times, the business environment can be inspiring and motivating. At the worst of times, disputes among members may spill from the home into the workplace and routine business decisions can become clouded by emotional issues.

These are a few obstacles that may need to be overcome when working alongside family.

  1. Hierarchy
    This is a system of almost unwritten and unspoken rules and tasks. In a family you may be the ‘big’ brother or the ‘funny one’. When you are at work in the business, your role may demand different behaviours, or you may find it difficult to be taken seriously. In most cases the family hierarchy sneaks its way unconsciously into the business and puts strain on relationships.
  2. Commitment
    It is tough to hear and accept criticism under any circumstance. When it comes to family businesses, it is critical that there be a common commitment among the business members to be, open to and aware of feedback and criticism with a positive attitude and a willingness to learn. If the parent is not offering constructive mentoring, skills transference and is comfortable giving tough love feedback they are not doing justice in the workplace relationship. They do however have to be open to new ideas that new generations bring as the younger family members often have a better understanding of the new emerging target market.
  3. Fitting Jobs to Skills
    Finding the right role in the business for each family member is important. Creating positions for family members who are just ‘looking for work’ or giving them jobs that don’t fit their skills can be counter-productive. For example, staying relevant and building work leads through social media platforms and websites requires a family member who is more knowledgeable on the latest marketing tools and tactics. This may be the ‘younger’ son or niece as opposed to the uncle with 30 years of accounting experience.
  4. Fair Compensation
    This is a tricky one when it comes to family, where some might feel they are contributing more than others but everyone has an equal stake in the business. This can build up resentment and feelings of entitlement. A way to avoid this is by paying each person’s salary based on what they would be paid in a similar position in the open market. Overall company performance can be enjoyed by all in annual bonuses or profit share.
  5. Planning Ahead
    Studies show that family businesses have approximately 1 in 3 chance of continuing to the next generation and that only 12% transition to the third generation. For the business to remain active and successful, succession planning is important. This means having a well-defined plan in place that establishes the lines of responsibility and authority in various situations and outcomes as well as a dispute resolution process or creating an advisory board. If business owners wants their children to join them it is important that they empower their children, be open to change and be comfortable to let go when necessary.

When it comes to running a successful family-owned business, it is important to acknowledge the dynamics involved. It is not easy to predict how family relationships will alter during the process which is why it is vital to have the foundations, structures and goals for a successful business in place beforehand. Families that are willing to establish strong lines of communication and set firm guidelines can find that delicate balance of family unity and business success.