Top 10 tips for family businesses

Top 10 tips for family businesses

Posted on Posted in Business structures, Small Business, Tax Planning, Taxation

Top 10 tips for family businesses

If you are considering starting or running a family business, here are some top 10 tips for family businesses. Our office represents clients in a vast array of industries and many of them are family owned.

Family businesses come in all different shapes and sizes and account for 70% of all businesses in Australia.

Like all businesses, a family business can have advantages, such as flexibility, and disadvantages, such as family conflicts.

It is one thing to be born into a family owned and operated business. It is another thing to enter into a new business with family members. An existing family owned business should have revealed all the wounds and weaknesses over time. Whether the family owners have dealt with or improving such weaknesses is another matter.

When entering into a new business with family, keep in mind the skills that the business needs to succeed are limited to the skill set of the family members. Are you actually employing the right individuals into positions or are you employing them on the basis of being family?

Family Business
Running a family business. Great idea or remedy for failure?

To help your family business run smoothly, the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has put together these top 10 tips for family enterprises :

  1. Leave work at work and home at home.
  2. Have clear roles for each family member.
  3. Pay the award rate to all family members who work there.
  4. Use outside advisors for unbiased advice.
  5. Have a good management structure – don’t confuse ownership or inheritance with management.
  6. Be open with communication – both good and bad news must be shared.
  7. Clearly outline the entry and exit conditions for family members involved with the business from the beginning.
  8. Develop a succession plan and make sure that all parties agree on the transfer of ownership.
  9. Hold regular meetings and family ‘retreats’.
  10. Use mentors and family business forum groups as a sounding board.

Always consider the structure of family owned businesses for a smooth handover or exit strategy. Our team at Peter Mansour & Co are ready and available to assist.