Working with family
Ellen Rohr joined her husband's plumbing business and learned a lot. She shares her tips for going into business with your family. Ellen Rohr is an author, business makeover expert, and paid contributor for Wells Fargo.
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My husband and I started working together with high hopes of building a successful business, but we knew the rewards of a family business — the legacy of opportunity, wealth, pride — could come with challenges. And if family relationships become strained, it could hurt the business.
Here are some ways to prevent these problems before they affect your business's bottom line.
Start with your goals and ground rules. Gather the family business members together for a day or a half-day retreat. Develop goals together and create a plan for achieving them. If you anticipate strong disagreements, consider inviting a neutral party to participate. Also, set boundaries for work time and family personal time.
Get a handle on the money. With the help of a mentor, I reached KFP, a "Known Financial Position." This is when I fully understood all of my business financials. I put a budget together and improved operations, sales, marketing systems, and implemented a dramatic increase in selling price. This made all the difference to our company's success.
Commit to an organizational chart and salary ladder. Clarify who reports to whom, and who's in charge, what responsibilities and salaries each position is assigned, and what anyone must do to move to a new position. Make sure you spell it all out.
Schedule regular meetings to discuss operations, sales, and financial management issues. Update your business plan. Work on your business plan together and commit to a few actions each week that will bring it to life. You can use the Wells Fargo Works Business Plan Center.
Engage in succession planning before you need it. Discuss how a family member could leave without damaging the business or the bank account.
So many family business owners fail to apply basic business principles to their business because, you know, it's family. These suggestions will help increase the success of your business and may maintain healthy family relationships. When my husband and I started making money, business became a lot more fun.