Several Bollywood movies, especially those from Rajshri productions, and the endless barrage of Indian television soaps have depicted family businesses. Aside from the over-the-top drama in these entertainment mediums, the struggle of getting the nuance of such an enterprise is somewhat a reality. Keeping a business in the family along with making it a success can be tricky.
So how do you run a family business and make it a successful venture without getting feelings hurt or letting work dynamics affect home life? Establishing and managing a venture with your loved ones requires a special set of skills, some off-beat solutions, and a whole new level of communication.
Challenges Of Running A Family Business
Family-owned businesses are not immune to challenges like changing economies, finding and hiring the right employees, or increased competition in the market. In fact, there is also a unique set of challenges that family-owned businesses have to face as a result of the nature of their business structure.
- Family problems: Physical, emotional and financial problems among family members can make a huge impact on the day-to-day operation of the business.
- Informal culture and structure: For many businesses, having a laid-back culture is positive. However, the informal structure and culture found in many family businesses can equate to a lack of documentation, policies, and defined strategy, accountability and goals.
- The pressure to hire family members: It can be difficult to resist the pressure that comes along with requests or even demands from family members who want to join the business. This can become cumbersome to deal with if they lack the basic skills and experience needed for the position.
- Lack of training: The informal culture found in family businesses can result in a lax approach to training new employees.
- High turnover of other employees: Non-family employees may feel that greater opportunities exist within the business for those who are a part of the family and may grow resentful of the culture.
- Growth sources: A big challenge for family businesses can be determining where and how to get the capital and resources needed to see the business develop.
- Absence of an external view: While family members may not always have the same opinions, they often have similar upbringing and life experiences which may lead to a uniform view of the business. Businesses require external views of their company and their competition in order to thrive.
- Next in line: It is important for family businesses to plan ahead for business succession.
- Lack of an exit plan: Family ventures often lack a defined strategy for what will happen if an owner wants to retire, sell the business, or transfer responsibility. This goes hand in hand with succession plan issues.
5 Vital Tips For Smooth Operations Of A Family Business
Tip 1: Focus On Open Communication
Communication is the most important element of managing a family business. Expecting that your family members will have all the knowledge about what you want from a particular project doesn’t work. Discuss individual roles and responsibilities, clearly define expectations, and make sure everyone is in agreement before you proceed. Build trust, determine the values of your business, practice transparency, and understand the goals and aspirations within and outside the family business by setting up clear and official methods. Meetings, conferences and town halls help.
Tip 2: Stick To Formal Processes
Make sure that each and every contract or agreement is formalised in a documented form. It may sound easy to say that you trust someone just because they are family, there is nothing wrong with making it formal. This helps keep track of various ongoings as well as comes in handy when disagreements arise. Relying only on verbal agreements opens doors for conflicts and disasters. This is especially vital for job descriptions, operations and contracts.
Tip 3: Choose Logic Over Emotions
Being objective while interacting with family can be challenging. Feelings are hurt easily, and it is a common reaction to get defensive instead of taking the time to look at the issue from a logical perspective. Before you jump into a new deal or decide on a vital change, think about it from the “how would I deal with it if this wasn’t family” perspective. While emotions don’t magically disappear at work, reserving them for after-hours is a good idea. Train yourself to put business first at work and family as a priority outside.
Tip 4: Make The Most Of Family Ownership
A family-owned business provides you with invaluable benefits in the business world. You have the advantage of low-cost or no-cost labour in the form of human capital or even emergency loans that can be your key to survival. With family-run businesses, word-of-mouth marketing is a constant and your name creates a feeling of trust in the market. Deadlines can be managed, extra work distributed and you get a huge support system that makes it all worth it.
Tip 5: Get Outside Perspectives
The process of decision-making for running a family business can sometimes get restricted. To grow and flourish, ask for guidance from trusted outside sources. Sometimes family members can come to a decision based on bias or even a restricted perspective. Broadening perspectives from seeking advice from people will not only help you in incorporating new ideas, but it can also be an excellent way to give your business a reality check.
Read These Inspiring Stories Of Mother-Daughter Duos Scaling New Heights Of Success, Together!
You might think of men when you talk about family-run businesses like Godrej or Infosys. But things are changing and so is India. From brand giants to startups, women entrepreneurs are successfully establishing and managing various ventures.
1. Falguni & Adwaita Nayar, Nykaa
The name Nykaa is synonymous with all things beauty in India. The founder, Falguni Nayar, has not only carved her name as a pioneer in this industry but continues to further expand the brand. Her daughter Adwaita is the CEO of Nykaa Fashion and has joined Falguni’s company as the offline retail head. This budding entrepreneur is certainly making head turns with her hunger for growth.
2. Sangeeta & Shubhika Jain, RAS Luxury Oils
Co-founded by mother Sangeeta and daughter Shubhika Jain in 2017, Raipur-based RAS Luxury Oils offers a range of natural and plant-based wellness products. The brand is also the first fully farm-to-face venture in India. RAS distributes and markets its products through five-star hotels. The brand also has an online presence on portals such as Nykaa and Amazon, and their own website.
3. Anureet & Arushi Sethi, Trijog
Mumbai-based Trijog is a progressive mental wellness platform that offers a variety of solutions for every need of clients, institutions, and corporates. It was founded in 2014 by mother Anureet and daughter Arushi Sethi. Arushi grew up seeing her mother Anureet, a clinical psychologist with over thirty years of experience, fighting the stigma surrounding mental health and helping people better their lives. Trijog started as an assignment to come up with a company idea during Arushi’s final year of college in 2014. Wondering if she could use the opportunity to make an impact, she approached her mother, and together they started Trijog – Know Your Mind Pvt. Ltd.
4. Shanta & Sulagna Ghosh, Sienna Store & Café
It was in the small, culturally inclined town of Shantiniketan near Kolkata, that Sulagna Ghosh decided to set up a small pottery workshop to retail wares and train and provide employment to local artisans. The entrepreneurial venture was prompted by her experiences, but also it was the aim to convert her mother, Shanta Ghosh’s part-time business into a full-fledged one that guided her decision. What started out as a small-scale workshop has today turned into the multi-outlet Sienna Store & Café in Kolkata, raking in an annual turnover of Rs 3 crore. Shuli claims that what separates their store café from the rest – their new Park Street branch also doubles up as a co-working space – is the aesthetics.
5. Tanvi & Mira Shah, The Millennial Kitchen
Mother-daughter duo Tanvi and Mira Shah aim to solve the quintessential question of what’s for dinner with their cookbook, The Millennial Kitchen, which is basically a selection of easy-to-cook recipes that “will warm your heart”. From ‘Party Starters and Cool Platters’ to ‘Meals for One and Two’, the cookbook covers a wide range of recipes for – as the name suggests – millennials and their mothers. “Millennials are liberal, tech-savvy, and have the propensity to eat but not the bandwidth to cook. This book shows a simple way to cook healthy yet delicious food,” said Mira about the inspiration behind the cookbook. All proceeds from their cookbook go to the Akshaya Patra Foundation, a philanthropic organisation based in South India.
Key Dos & Don’ts While Running A Family Business
- Do invest in leadership training. While family members may share certain personality traits, it’s unfair to assume that leadership skills come naturally.
- Do build alliances. Make sure the next generation knows your key advisors.
- Don’t confuse equality and fairness. Treating everyone “fairly” does not mean treating everyone “equally.”
- Don’t isolate yourself. It’s not unusual for family business owners to turn to their relatives as their chief source of advice and support.
- Do ask the business what it needs. Too often the family starts succession planning by thinking about their family members and what will work best for them.
- Don’t put all your eggs in one basket. You need to have backup plans and a team of people to run your company.
- Don’t exclude key stakeholders. You need to involve all of your stakeholders; your vendors, your employees and your family members.