A significant number of businesses in the U.S. have some form of family involvement. A family-run business can certainly have its advantages. The company doesn’t have to look far for recruitment, board members and staff are highly trustworthy, and the business can be passed from generation to generation.
Nonetheless, family businesses do face some unique challenges. Here are some important points to consider.
Accusations of nepotism
A fundamental aspect of running a company is providing equal opportunities. Your workers should be hired on the basis of skills and experience and not simply because of who they are. That doesn’t mean you need to exclude family members. They just should not receive unfair advantages.
One way to eliminate this risk is to ensure that your company has clear policies regarding discrimination. You may include these in an employee handbook. All workers should also be provided with contracts that outline their roles, responsibilities, rights and obligations.
Succession planning
At some point, all business owners need to step down. This could be due to voluntary retirement or having to leave due to illness. That’s why it’s so important to have a succession plan in place. Of course, there’s always the possibility of passing away unexpectedly. Your succession plan outlines who takes over the reins once you leave.
You can certainly include your family members in your succession plan. A family member may be the best person to take over. However, you should discuss this with them first. If looking at someone outside of the family is best for the business overall, then you’re not obliged to stick with a family member.
Running a family business can be rewarding, but there are challenges. Seek legal guidance to help ensure that you take steps that are in the best interests of the company.