Three Things That Spell Certain Disaster For Family Businesses

There are countless successful corporates that started out as family business, but there are also many more family businesses that fizzled out before they could make it big.  Alexander F Bouri found significant success in the cement business, but other family business owners haven’t been as lucky.  It takes a lot of work to run a family business, and keeping a balance between your work life and your home life can be difficult.  There are a lot of reasons why some family businesses don’t make it past their first year, and if you want to run a successful family owned business you should try to avoid making these mistakes.

Nepotism

This is one of the biggest reasons why family businesses fail.  If you’re going to run a business with your family, you need to hire people based on whether or not they have the ability to do their job, and not if they share your DNA.  Hiring, promoting, and managing your employees based on their bloodlines can lead to failure, and resentment from non-related employees.  It could also lead to your favorite family members/employees slack on the job because they know that they won’t have to face the consequences.

Emotions

It may seem harsh, but the phrase “It’s not personal, it’s business” has no place in a family run company.  Separating your emotions from your work can be very difficult, and the task becomes even more difficult when you’re managing your family.  Having your emotions interfere with your business can lead to several problems.  Your employees could take your emotional decisions as a sign of weakness, or a sign that their boss can’t handle what would usually be simple situations in a non-family owned establishment.  It could also cause some of your family members/employees to resent you if they think you’re acting too emotional.  Try to reign in your emotions when you’re dealing with business.  If you don’t, you could be setting yourself up for failure.

Refusing outside help

Unless you have a huge family with members that are experts in your industry, you’re going to have to hire people who you aren’t related to.  Refusing to hire employees who aren’t your family members can end in disaster.  It’s impossible to start a business from the ground up without skilled help, but there can be risks when you hire people from the outside.  If you have a business that’s full of feuding family members, your other employees will get sick of working in a hostile environment.  Don’t refuse help from other people, and make sure that your non-related employees feel like they’re being treated fairly.

Business Tips: Starting a Family Business

The world of business can be very rewarding, being able to create and sell a product or service people need can give your life purpose.  Some people choose to go into business by themselves or with a friend, but family owned businesses are growing in popularity.  Family owned businesses were almost the only businesses in existence in the past, and even though their presence has declined over the years existing family business are still successful.  Seament, one of the largest international cement traders in the world, was founded by Alexander Bouri and is now run by his sons.  Big name companies like Walmart, Samsung, and Ford are family owned businesses.  If you want to include your family in your business ambitions, here's some advice on how to make your new business venture a success.

Identify the Need in Your Market

Some people go into business after spending years developing a service or product, and others have a passion for entrepreneurship but don't know what they want to sell.  If you want to provide a product or service you know people want, focus on potential customers in your area.  Think back to conversations you've had about your town with friends and neighbors.  Do you remember somebody saying that they wished there was a reliable dry cleaning service in town?  Did your next door neighbor mention that he misses the old pizza place that used to be around the corner?  Once you figure out the need, you'll be able to start your business.

Identify Your Family's Strengths

After doing some brainstorming you've decided on what product or service your business is going to provide customers.  Now that you know what you'll be selling, it's time to think about how your family members can help your business by identifying each member's strengths.  Does your son know how to use a cash register?  Is your spouse well-known enough in the community to attract people to your business?  Does your daughter know how to design websites and use SEO?  If you spend time truly evaluating your family's strengths and weaknesses you'll be able to find something useful every member can contribute. 

Identify Their Feelings

Even though it's your dream to have a family owned business other family members may not have similar feelings.  Nobody likes having to do something they have no interest in, especially if they feel like they're being pressured into doing it.  Don't spend time trying to recruit your family members, mention your idea to them and see if they have an interest in helping with your business.