According to the Small Business Administration, family-owned businesses make up about 90 percent of all businesses in the U.S. Like any other business venture, it won’t be without its challenges; however, starting and growing a family business can be a rewarding and lucrative experience for everyone involved if you set yourself up for success.
Once you understand the unique challenges that working with family presents and come together with the common goal of making the business a priority, you are on the right track to success.
Here are 5 tips to manage the intricacies of a family business venture:
- Establish a Chain of Command – The first thing your new business partners/associates should know is exactly “who does what” and “who is in charge.” Each family member needs to be clear about his or her role in the business and what is expected of him or her. In addition, a very clear line of authority for decision making should be set forth in the beginning and those who do not have a role in the decision-making process should be aware of this.
- Keep Good Track of your Money – Unless you are a charitable nonprofit, you are in the business of making money. Every small business needs accounting software that is user friendly and gets the job done right. Quicken allows users to test free accounting software for small business, which is easy to use and inexpensive to operate. It allows users to try the software for 90 days before committing to a purchase.
- Separate Business and Family Expenses – Keeping business and family issues separate can often be a difficult task. Is a family dinner out a deductible expense if you talk business for only 10 minutes? The IRS has a micro site devoted called Small Businesses and Self-Employed to guide taxpayers on this topic. Expensify is an app that helps you keep track of business expenses by allowing employees to scan and upload receipts. This popular app takes the stress out of separating expenses; it lets users submit expense reports to employers for approval with the click of a button; and lets you export the info to your accounting software! And … it’s free.
- Simplify Your Credit Card Payments – Square is a new app founded by the folks who created Twitter. It allows anyone with a tablet or smartphone to accept credit card payments via a free card reader. There are no up-front or even monthly fees, which makes it a key app for small businesses. Square simply charges 2.75 percent of each transaction for users.
- Use Free Marketing Tools – Managing your company’s social media can be a full-time job for new businesses. Scott Gerber, founder of Young Entrepreneur Council, recommends HootSuite because the social management system lets small businesses manage all of their social media networks on a single dashboard that is easy to use and track. HootSuite offers a variety of plans for businesses including a free service.
About the Author Randy runs HR and payroll for a small plastics manufacturer. When he’s not working, he plays maracas and sings in a salsa-fusion band.