Family businesses, more often than not, are burdened with problems non-family owned businesses do not have.  Family relationships can impair performance and destroy what has been built putting a strain on the family and the business working relationships.

However, with good planning — and lots of it, family owned businesses can survive the test of time.

Consider the following to minimize conflict:

Create a hierarchy — The chain of command must be unambiguous and have clear job descriptions – They must be well defined and based on skill, not family relationship. This is a must!

Communication — Miscommunication or a lack of communication can create resentment and frustration.  Intermingling business at family gatherings and holidays is a not opportune.  Regularly scheduled meetings with an agenda ensures family members are informed and gives them an opportunity to speak their concerns and offer other options.  And to be sure everyone is heard incorporate the use of a “talking stick” – a tool passed around and only the one holding the stick is allowed to speak.  Using the “talking stick” allows each person to be heard to express his or her point of view without interruption.

Compensation Rules — A young business might not have the cash flow to compensate family employees, but as the business grows it is very important to have a predetermined compensation plan.  By having this plan in place it ensures each family member being compensated for their work ethic, skills and expertise, not because of their gender, family circumstances ie; married with children or single, or place in the family.

Plan to Enter the Family Business — It is very important to establish a plan to welcome family members into the business.  It is recommended that family members get related experience outside the family business before they come on board.  In some cases 5 years of working in the “real world” is required.

Succession Plan — In order to make sure your business will survive after the founder retires or dies having a succession plan in place is an absolute must.  Many family business owners fail to do this as they do not want to give up control or acknowledge their mortality, but if you do not plan for succession the business will not survive to the next generation. According to the American Family Business Survey only 30% make it to the second generation.