Dealing With the Sticky Side of Your Family Business
Family businesses run the world, but that doesn’t mean they are perfect. Productivity is notably lower in family businesses than it is elsewhere. You don’t want to punish your family like you would an acquaintance, after all. However, this isn’t the only place where family businesses can run into trouble. Don’t let your family dynamic set foot in your business and get everything sorted legally in advance so that you don’t have issues with running your business and can instead enjoy the best of both worlds.
Create Job Roles In Advance
When creating a family business, you want everyone’s job roles to be created and solidified in writing. Otherwise, you will have that one family member trying to do a job they aren’t good at, but you can’t tell them. In some cases, this will be known as a shareholder’s agreement. It outlines your roles and the percentage of the company that you own.
It makes the hierarchy of your business clear and understandable right from the start, and limits issues concerning power.
Create a Contract for Your Family
Contracts are legally binding, regardless of whether you are blood or not. By creating a contract, you can outline the dos and don’ts of working together as a family. It’s the same as hiring any employee and having them sign a contract; only these will protect the rights of every family member.
Everyone has a legal stake in the family business, so a fight won’t mean you lose everything.
Ensure Your Family is Insured
Insurance is critical. You need to be insured both against disasters and against liability. If you aren’t, you could lose everything and pay out of pocket. The reason why this can help you deal with the sticky side of the family business is because you cannot directly control each and every one of your employees. If a guest to your restaurant falls off their perfectly fine chair, you can be sued, and you will probably lose – hence the importance of liability insurance. On the other hand, you can also be sued if your nephew hit someone with your company car. Liability insurance protects your business and your family.
Liability and disaster insurance is a legal requirement and more importantly, it’s how you will protect your family from going broke during a lawsuit.
Keep an Updated Will
Your entire family should also keep an updated will at all times. That way, if someone dies, their wishes about their personal assets and their share in the company can go as they want, not as the government dictates. If someone with a majority share in your company were to die, it would go to their spouse. If that is not the outcome anyone wants, including the deceased, then there might have been some suspicious activity regarding their will going on around their death. You can contest a will with The Inheritance Experts, but it is far easier to keep an updated will (created with a lawyer and stored professionally) in the first place.
Keeping an updated will and having a lawyer help you draw it up and store it is one of the best ways to limit fraud from occurring after your death.
How to Move On After an Argument
Last but not least, learn some great strategies to diffuse an argument. You don’t want a family dispute to hurt your business. Diffusing arguments can be complicated amongst family members, as you are stuck together, but that doesn’t mean it is impossible. For the sake of your company, you should all aim to get along and remain professional.