Keeping It In the Family: Top 7 Tips for Running a Successful Business With Family

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top tips family business

Running a franchise with family can be very rewarding. But there are plenty of unique challenges that crop up when working with those closest to you. Heres our guide to turning your family unit into a franchise dream team.

The term family business often conjures up an idea of quaint, small-scale operations without massive profit potential. So it might shock you to learn that multi-national companies like Nike, Porsche, Samsung and Walmart all started out as family-run businesses, and are still largely controlled by their founding families.

If youve always fancied running a franchise with family, you could be one of the lucky broods that take your operations international. But sibling rivalries, family feuds and a lack of separation between your work and home life can derail your chances of success if youre not careful. Weve put together seven of our top tips for running a successful business with your family.

1. Make your partnership official

This is one of the biggest mistakes you can make when running a business or franchise with family. Even if you trust them with your lives, you need to set up a secure foundation for your business partnership by drawing up a formal agreement or contract. If youre entering into a franchise agreement with a family member, your responsibilities and financial contributions to your franchisor will be set out in the contract. However, the agreement wont cover your responsibilities to each other, as most franchise agreements treat franchisees (whether youre an individual, family or even a business) as a single entity.

Its worth speaking to a solicitor separately to formally establish how your partnership is going to work. Will your profits or be split 50/50, even if one person contributes more to the initial franchise fees? Which duties/roles will your family members be expected to fulfil each week? What will happen if one person walks away from the business? This way, if a nasty spat happens, youll be protected from financial fallout. Or if someone isnt pulling their weight, youll have something official to remind your lazy relative of their responsibilities.

2. Keep communication professional

Lots of family members are offensively truthful with each other. When running a business, this unflinching honesty can cause massive conflict and affect your work negatively. Its important to clearly communicate yet remain positive when talking through business challenges with family member. Familiarity can often lead to issues being addressed unprofessionally or too informally youve still got a right to be treated fairly even if your boss or colleague is your brother or mum.

Organisational psychologist Dr. David G. Javitch explains:

The company [isnt] a playground for working out family problems. You needn't be fawning or ostentatious with your praise or criticism of them, but you do need to be professional and appropriate, whatever the true nature of your feelings and attitudes toward others, especially family.

Establish a way of sorting out problems before you start working together. Can your franchisor/franchise support team, or a family member or friend that wont take sides, act as a mediator? Is it best to put conversations in writing (through email or text) if you find things escalate to an argument in person? Could you set aside time each week to chat through issues that come up in a calm and productive way? Sulking or the silent treatment might get your sister to lend you her top, but its never going to work in a business partnership.

3. Assign the right roles

You might be tempted to take a more relaxed approach when working with family, but it can quickly lead to confusion, mistakes and even nasty arguments. Your franchisor and any employees need to know who is in charge of every part of the business, from marketing to accounting to managing customer relationships. Worse still, if vital duties, such as sending/paying invoices or keeping track of your accounts, are regularly missed, your business could end up in serious trouble with clients and even the law.

As a family, you probably know each others strengths and weaknesses well. Use them to your advantage. If your cousin is a maths whizz, let them handle any accounting, while your aunts legendary charm will make her a great person to oversee client relationships. Be honest with yourselves too even if you really want to look after the diary, its pointless if youre famously disorganised. Once a decision on roles and responsibilities has been made, make sure that theyre communicated to everyone within the franchise, including your franchisor and any employees.

4. Be honest with each other

A huge benefit of running a family franchise is that trust and loyalty are an integral part of the business. However, the challenges of a new business can put a strain on even the best familial relationships.

Being able to trust your business partner ultimately enables you to delegate without having any concerns. It can also allow one partner always to be working on developing and growing the business while the other runs the day-to-day operation of the franchise, giving you a competitive advantage.

Dont ruin this by not treating your family with the same respect you would a normal colleague or business partner. If youve said youre going to do something by a certain time or date, stick to it. On the other hand, dont let your family member load too much on your plate just because of your relationship. Treat each other with respect and keep your promises and youll see the best side of working with your family.

5. Ask for additional help

If you find something that nobody in your family wants to or is able to manage, dont be afraid to recruit new faces to strengthen your business. You might be set on growing your franchise without employees so you can enjoy all of the profits, but its often a sensible step to take on an extra pair of hands.

Whether its someone else that can offer your franchises services, an admin assistant to keep you organised or a business coach to take your operations to the next level, strategic recruitment can help your business to grow. It might be tricky to find someone that fits with your family dynamic, but once you do, youll go from strength to strength.

6. Separate business and downtime

When youre working and living with your family, the lines between professional and personal life can become blurred. The most successful franchises are run by passionate and committed franchisees who can maintain a healthy work-life balance.

Make a rule not to discuss work issues at home or family gatherings. It can be easy to fall into the trap of talking about the business all the time. Not only does this mean that you're not giving yourself quality downtime, but discussions are rarely productive during social occasions (especially if youve had a few drinks). It's best to keep the work-related conversations to set times or days and enjoy your precious time off together as a family, rather than as work colleagues.

7. Celebrate your achievements

Starting a franchise can be tough and its so easy to fixate when things go wrong or progress is slower than anticipated. Working so closely with a family member is bound to cause friction and tension at times too.

Take time out regularly to stop and consider how much youve achieved. Set realistic goals and then celebrate when you reach them. The best thing about running a franchise with a loved one is that you get to experience the good times with someone you really care about and build a profitable future together. Youve made your dream a reality remind yourself of that when times get tough.

There are many franchises to buy that are ideal for families. Why not explore your love of food with a restaurant franchise? Or start your beauty empire with a beauty franchise? Maybe youre an active family, and a sports franchise is your ideal fit? Whatever youre into and wherever your strengths lie, weve got hundreds of franchises for every family on our UK franchise directory.

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