What to keep in mind when working with family
7 Oct 2019 FINANCE
By Nomali Cele
Working with family is difficult but for some people, it’s the one way they are able to see their business ideas become reality. Family business tips shouldn’t only apply to big conglomerates but they should consider the SME and the many South Africans making the most of the township economy. If you have decided to work with family to reach your business goals, it’s important to set some ground rules.
Family business tips: Do the paperwork
It’s so easy to let the legalities and contracts slide when you work with family. You know and love them so your word should be enough, right? Wrong. You can have one verbal agreement with an uncle as you start the business only for them to be influenced by their children or spouse to change the terms. When that happens, there isn’t much you can do unless you have the original terms of the agreement written down.
Family business tips: Be fair
This is especially important for family businesses being built by nuclear families. It’s important to be fair to all those involved, especially children. If you have the children working in the business after school, on weekends or during the school holidays, it’s important to be considerate of their time and life.
Having the kids make sacrifices like not getting to do something they were really looking forward to just to work on the business is a breeding ground for resentment. In these kinds of family businesses, it’s always important to make the kids backup you rarely call on and actually hire people, even on a part-time basis.
It’s also important that you are fair in the workplace and treat all employees the same. Rules must apply across the board and the same with consequences in the event that rules are broken. Employees will start to notice if you are treating your relatives differently and it will create discord.
Family business tips: Agree on compensation
Yes, it may take a while for the family members involved in the business to start drawing a wage but it’s important to agree on what it will be and stick to that. Suddenly paying each other double the agreed-upon amount just because the business had a good month, is not good for business and is unsustainable.
Family business tips: Remember why you do it
In an interview with Forbes, Kelly Vlahakis-Hanks, a CEO of a family business that was founded in 1967, advises other leaders of family businesses to remember the values on which the business was built. Not only keeping those values in mind but to pass them on to the next generation.
These founding principles are what will guide the family business in the future and will help future generations continue to tell the story.
The Uncaptured team and listeners recently discussed the highs and perils of working with family. Listen to their eye-opening stories below: