If you’ve inherited your family's business, you’re part of one of the largest forces in the U.S. economy. Family-owned businesses contribute 70% to 90% of the world’s global GDP.1 In America, family businesses are responsible for 62% of the country’s employment.2
As part of a business family, you already know about its daily operations and the company's mission. However, inheriting and expanding a family business are different things.
Consider these five ways to ensure the growth of your family-owned business.
Separate work and family. One advantage of working with family members is that they know you, and ideally there’s a sense of trust and a level of commitment that took many years to develop. However, working with family can have a few downsides when conflicts arise. Set limits on discussing work topics at home (and home topics at work). Many people take their work home, but establishing ground rules on how to handle this is beneficial for both your work and home environments.3
Evaluate everyone’s strengths and set expectations. In any business — and particularly in a family business — there can be a tendency to “do things the way we’ve always done them.” As you take control of your family's business, use this shift in leadership to reevaluate the strengths and goals of each member of your team. Then, define who's in charge of each area of the business and outline what that entails. Be clear and set specific goals and objectives to help each individual and the business succeed.4
Leverage your business’s advantages. Unlike a startup business, you already have an established brand, a team of employees and relationships with your banker and community. Those are advantages that most new business owners can’t claim, and you want to avoid underestimating them. Look at how you can improve operations using these assets, and start crafting your plan to lead the business successfully into the next stage of its legacy.
Encourage some family members to leave the business — for now. Working in a family-owned business can create tunnel vision. You might be tempted to do things the way they’ve always been done, and as times change, those ways may not be as effective as they need to be. Saving for and attending college, studying business and working outside the family business for a time gives younger family members the opportunity to gain new insight and develop skills they can bring back to help the family operation thrive.5
Create a business succession plan. Although you're taking over your family's business, it’s important that as the owner, you create a plan for its long-term future. That includes creating a succession plan with your trusted legal, tax, and business advisers. According to a recent Nationwide Small Business Survey, three of five small business owners don’t have a plan for what to do with their business when they're ready to retire. Having a succession plan allows you to identify who will lead the company in your absence or, if other family members aren’t interested, what you'll do with the business.
Knowing where you're headed and how you'll get there are keys to the success of your family-owned business. Getting the right financial advice can ensure you have a solid plan that helps you reach your goals. See how Nationwide can assist you on your path to success.