Keep Your Family Business Drama-Free

By Trip Holmes

Imagine a world where TV channels, multiplex cinemas, and performing arts centers are drama-free. While that world would be boring, one place that should be drama-free is your family business!

Running your own business is hard, even when there’s no family involved. I’ve been running my own company for 35 years, and I’m here to tell you that it’s hard when you’re having success, and it’s hard when you’re not. Challenges come at you “fast and furious” either way! But when you introduce family into the equation, your challenges can multiply exponentially.

Here are a few tips for helping you keep your family business drama-free.

Keep Family Matters Outside the Business

Families have disputes. Some can be relatively minor, while others lead to separation and ongoing anxiety. Regardless, your business isn’t the place to hammer out your familial differences.

There is probably no worse way to run a business than to bring personal family dynamics into play, both in the short term and over the long haul. In the short term, you can negatively impact employee morale, engagement, and productivity, and all of that reflects poorly over long-term results. Your inability to free yourself from family disputes at the office affects your bottom line, your destiny, and your legacy as you think about retiring and exiting the business.

No Special Treatment—Good or Bad

All too often, family members can run roughshod over an otherwise well-run operation.  You know there’s a problem when an employee refers to a manager or executive first as “so-and-so’s son” before they talk about what a good leader or efficient operator they are.

Family members—for all sorts of reasons—should be treated fairly as “normal” employees are. That means no special rights or privileges, as well as no extra demands. This makes me think of how some guys coach their sons in baseball, and how some guys’ kids get to pitch without a good arm, and some guys come down way harder on their own kids. The bottom line is: be fair to your family, be ethical and transparent, and treat them with the same level of regard you have for everyone else. Favoritism or undeserved harshness will only generate toxic drama.

Plan, Plan, Plan, and Plan Some More

Any great family-owned business with the potential for multi-generational longevity needs sound planning. In addition to a healthy modicum of business planning, you also need succession planning and transition planning.

Succession planning isn’t just about figuring out who the top dog will be after mom or dad retires. It’s about leadership planning. Do you have a bench of leaders, both in the family and others, who will be ready to assume new responsibilities through the years? Does everyone clearly know what his or her role is within the leadership structure, in the present and moving forward?

Perhaps the most careful consideration for the business owner is how ready, how equipped, and how suited their children or relatives are to take over the business or have considerable management responsibilities. One of the worst things that can happen to a business—and create fatal drama in the process—is working without a plan and then having an unprepared or ill-suited child take over the business to the detriment of the employees and customers. 

We Can Help

I have spent my entire career working with middle-market, family-owned businesses. What an honor that has been! We find great enjoyment and fulfillment in helping family entrepreneurs address the challenges of building a business with great value that can transcend the founding generation. Give us a call for help with your business planning, succession planning, and transition planning, as well as your exit strategy.