There are many benefits of owning and operating a business with your family. You are working alongside the people you trust the most to build a legacy you will be passing down to future generations, so your career is probably more fulfilling than average.
However, just like in any workplace, you are bound to experience conflicting opinions and work styles. The difference with family-owned businesses is that these conflicts can be emotionally-charged, causing an increase in hostility. The people we love the most somehow have the ability to make us angrier than anyone else can, too.
Luckily, it is possible to manage and minimize conflict by taking preventative measures that will keep emotion from getting in the way of your business. Here are five tips for keeping drama out of the workplace:
1. Decide who’s going to carry on your legacy.
Choosing a business successor can be one of the touchiest sources of family conflict. You don’t want your family fighting over who deserves to take over once you’ve stepped out of the business.
Making a succession plan is extremely important for a family business’s longevity. If you want your business to continue thriving in your absence, you’ll need to decide whom you’re going to pass it down to, especially if you want your business to stay within the family. This is one of the most important business decisions of your career, so you’ll need to go through the process carefully.
Observe potential successors in the workplace, taking note of their competency, leadership ability, and passion for their work. Talk to outside sources for objective perspectives-- your business partner or employees can give you insights into family members that you might not have noticed since you have an emotional attachment to them.
Once you’ve narrowed down your choices, talk openly about your plans with your family. You don’t want your decision to come to a shock; address any concerns family members may have, and make sure your chosen successor is enthusiastic about carrying on the family legacy.
After everyone’s on board, you can begin slowly transferring ownership to your successor. The sooner you start this process, the less the estate tax on your business will be after you pass.
2. Create a compensation plan.
Family members might expect a salary that you’re not on board with, so make sure the compensation of each job you offer is predetermined.
Conduct research on average salaries for the positions you are hiring for. Then, match your job descriptions with a fair, reasonable range of payment. If your positions are already filled, you might consider speaking to a consultant to help you determine the value you should be attaching to each employee.
Draw up a path that will lead to bonuses and promotions, and make your expectations of your employees clear. That way your family members will understand the work that needs to be demonstrated in order to climb towards a raise.
3. Treat every investment professionally.
If a family member chooses to invest money in your business by buying a share or offering a loan, do not treat the process casually. Conflicts can quickly arise if your family investors decide they want their money back sooner than you anticipated, or if you choose to bring outside investors into the mix.
Avoid this stress by communicating with your investors from the get-go. No matter how close you are with your relatives, you’ll want to make sure they fully understand your business, its structure, and your plans for their investments before they give you any money.
Draw up a written agreement so that your family will understand when it will receive return on its investment as well as have an idea of where exactly its money is going to.
4. Don't blur business time with family time.
When you work with family members and you’re all passionate about what you do, it’s natural that you’ll want to talk business all the time.
However, turning every family dinner into a board meeting will cause relatives who are not working with you to feel left out. Plus, you’ll miss out on building connections and sharing experiences that have nothing to do with your entrepreneurial ventures.
So even though it might be tempting to discuss a business project at the breakfast table, make sure you draw lines between where business time ends and family time begins.
5. Hire a mediator.
No matter how many preventative measures you take, conflict is bound to show up in the workplace. When family is involved, workplace drama can get messy, so you should consider hiring a mediator to help you and your family members communicate solutions to the problems you are facing.
Mediators will help your arguing family members understand the underlying reasons of their conflict. They will also prompt their clients to vocalize possible solutions until a valuable resolution has been agreed upon.
A mediator might not be necessary for every argument that springs up around the water cooler, but when both family relations and the success of your business are at risk, mediators are a non-intimidating and affordable option.