Starting a family business is a pretty ambitious endeavor. You have to focus on beating the competition, struggling to become profitable, and scaling the business. Sometimes, it’s hard to stay in the game if your competitors have corporate-sized tools and solutions which a small family enterprise can’t really afford. What are you do to then? You can’t raise your prices beyond the tolerable limit without losing customers. With a budding family business, it’s best to be aware of these potential issues before you actually start running it. Here are 5 crucial matters to be aware of when starting a family business.
- Finding and keeping qualified staff
If you’re just starting a small to middle scale family business, one of the first struggles you will face is finding and keeping a properly trained staff that can deliver the work you need. Trust us: nothing will be more frustrating in your initial period than the staff always being weakened by a position never being filled by someone competent, leading to a new person on the job every three months, or by someone in the old staff constantly leaving. It will make you feel like there’s no actual time to finally get someone up to speed with the complexities of the job so you can finally relax and start relying on them to do it, because as soon as that happens (or even before), they will move on to a better employment offer. Since you can’t afford the package of salary and benefits which your competitors will use to lure them in, all you can do at this point is to be aware of this drawback and strive to keep your employees loyal and happy by making them feel part of your long-term plans.
- Maintaining the balance between business and family
Another challenge will be keeping the business pressures from interfering in your personal relationships within your family, since several of its members will be involved in the start-up you’re creating. More often than not, problems such as what is “fair” to everyone and how much is a person entitled to, as well as each person’s responsibilities, are matters which can be seen very differently by the people involved. Make sure everyone is on the same page in order to avoid tensions and potential conflict.
- Facing the competition without raising prices
It’s pretty clear that at least for a while, you will not be able to afford the centralized tools and business solutions which major corporate competitors will have. That means they will be able to offer seemingly the same product as you, for a more competitive price. But you shouldn’t let that discourage you into either lowering your prices so much that you fail to gain enough from the sales, or into raising your prices in order to keep up with the perks your competitors offer. The solution lies instead in capitalizing on the one thing your business has and theirs don’t: the community feel and the added human value of each service you provide. Go out of your way to personalize a product or to make a client happy and you can be sure your company’s fame will keep growing.
- Gaining access to capital
You will very likely struggle to get access to capital. Attracting funds and investors or other such opportunities is a full-time job by itself. At this point in your development, there isn’t much to be done about that except being patient and allowing your company to grow through delivering quality, at first. Nevertheless, always remain open to opportunities and once a profitable one appears, don’t hesitate to change the initial vision you had, even if change is sometimes hard. But adaptability is a survival skill, especially in the harsh world of business.
- Handling the taxes and paperwork
Establish very clearly who handles what. Tax paperwork and accounting can become much messier than you might imagine. You need to not only assign the best person to the job, but you also need to make it very clear who is responsible for which aspect of organizing a financial paper trail. Otherwise, you’ll end up wasting time and money on tax issues.
Running a business with your family can be great, just make sure you go into it with your eyes wide open. You want to make decisions in the best interest of the business and keep your family relationships strong.
About the author: Dave Conklin is the CMO at Incomestore.com, Co-Founder of RankPop & ProspectMX, Consultant to CEO’s of $10MM + Companies and Engaging Keynote Speaker. Find more about Dave at http://Daveconklin.org