The Joys of Running a Family Business

Running a family business has so many rewards. It is challenging when you first set up a family business but once you get the company up and running with a good operating rhythm and consistency then there are many benefits. Running any business is like a roller coaster ride, especially with a family business and dynamics that come with it, but when you average everything out, it is all worth it. When there is a transition from one generation to another generation, this can also change the dynamics with a new Managing Director coming in to take the company to the next level. If the family business is set up right, then this is when the family can benefit from the past hard work and investments that are then handed from one generation to the next.

One of the common challenges in family businesses is employing family members—brothers, sisters, in-laws, cousins, nieces, and nephews, all at different ages and with different personalities. On the one hand, family involvement can foster stronger commitment, loyalty, and trust, as everyone shares the vision of growing the company. However, if not managed properly, it can become disruptive, with differing opinions and agendas on how things should be run.

At KBA, we work with many family businesses and have seen both the positives and challenges our clients face. Many family members become great assets to their businesses when they are introduced and inducted at a young age, often aligning with their studies to complement the business. We have also seen parents encourage their children to gain experience elsewhere—working for other companies, even competitors—to understand different industry dynamics. This external experience can provide valuable business acumen, strengthening the next generation’s ability to lead.

One of the challenges with a family coming into a family business is how the current staff will react towards this person coming on board. This all links back to communication and expectations of what the business wants this family member to do.  Our advice has always been that they need to be treated no differently than any other staff member as they build their career path within the family business.  There should be no special rules from one family member to another, or any staff member as this could create and affect the performance and culture of the company.

Below are some recommendations to increase the commitment and retention in a family business:

• Business Strategy – What is the strategy for the next 12 months, 2-3 years, or even five years? Where does each person fit in, and how do they contribute to the business’s goals? A clear strategy ensures alignment among staff and family members.
• Roles & Responsibilities – A well-defined organisational chart outlining roles and responsibilities ensures that everyone understands their duties and respects leadership structures.
• Processes & Systems – All employees, including family members, should follow the same processes and systems that have contributed to the company’s success from the start. Expectations should be the same for everyone.
• Team Leadership – Every Manager, Team Leader, Supervisor, and Emerging Leader must align with the company’s mission, vision, purpose, and values while driving outcomes through leadership, communication, behaviour, and commitment.
• Company Culture – A family business must work just as hard as any other business to foster a cohesive team where family and non-family members collaborate effectively to achieve success, including recognition and rewards.

There are many benefits and dangers that can happen in a family business. Like any employee, family members should be inducted with clear expectations set by the owner or their direct manager. They must also be open-minded and willing to learn from business leaders. However, family businesses can face risks such as favouritism, lack of performance management, or a sense of entitlement among family members. The biggest concern is when family members or other staff members undermine others, gossip, or create a toxic work environment—this is unprofessional and can damage the business.

At Key Business Advisors, we are a family business ourselves, and we have built an incredible team committed to delivering results aligned with our mission, vision, purpose, and values. We create tailored strategies to help businesses go from good to great. With a proven model and over 17 years of experience, we have built strong, lasting client relationships across Australia.

To learn more about our company and to access some valuable information to help your family business grow, change and get to the next level, check out the following FREE Resources:

• Learn more about Key Business Advisors – keyba.com.au
• Conduct a Strategic Planning Workshop – https://keyba.com.au/strategic-plan/
• Conduct a Staff Cultural Survey – https://keyba.com.au/people-culture/
• Implement HR Best Practice – https://keyba.com.au/hr-documents-checklist
• Run and Leadership, Team or Sales Conference – https://keyba.com.au/conference-facilitator/

If you need help, why not give us a call? 

Let us help you to enhance the performance and culture of your business. Don’t hesitate to contact Key Business Advisors on 1300 4 ADVICE today!