Due to the uncertain economic conditions, some people have been fired. Others just want to ensure another source of income, in addition to their full-time job.
As a result, many families are thinking about launching their own startup.
No matter what group you belong to, becoming a business owner means completely changing your lifestyle.
In the following paragraphs, you can find some practical tips that will help you successfully manage your family business from day one.
1) Separate business and family budgets
Mixing business and family budgets is a major trap that families new to business can fall into.
If you spend money that’s not yours, you’ll start a dangerous and exhausting game of chasing your own tail, finance-wise. As a result, you may be late with payments to your suppliers, clients, or fail to pay your taxes on time. Such financial management can put your entire business at risk.
Because of that, make sure to separate your business budget from your private assets. Open a business bank account to keep your business assets there, away from your personal account.
If you’re a sole proprietor, be aware that you guarantee for your business assets with your personal belongings. In that light, keep your expenditure on a shoestring to avoid issues with the cash flow and accounts payable.
2) Distribute tasks among family members
In every business enterprise, business tasks and obligations need to be clearly specified.
So, running a family business doesn’t mean that family members should perceive it as fun. While having fun while carrying out business activities is not forbidden, high efficiency and smooth organization are priorities.
Only because you’ve joined forces with your family, it doesn’t mean that you should allow anarchy. What’s clever, however, is that family members switch at the position of the executive manager of business operations. This will ensure a higher level of democracy within the business and more cohesion between the interested parties.
Of course, this doesn’t mean that teenagers should be allowed to handle financial operations, but that adults could introduce such a democratic system.
As for task distribution, you can assign them verbally, via a project management tool, or by using Google reminders.
3) Keep the expenditure under control
We’ve already highlighted the importance of strict control of personal and business costs.
Now, let’s dive closer into asset management within a family-run small business.
For starters, no business money should be spent without a consensus between all the interested parties within the venture in question. For instance, if one family member thinks that it would be useful to buy a new computer for business, this decision needs to be approved by other family members. By avoiding unilateral purchases, you keep your expenditure under control.
Apart from that, no business deals should be closed without the authorization granted by the family council in charge of business management.
Only such a strict in-house supervision procedure will ensure that your business obtains only the things that are necessary for proper operability and efficiency.
In that light, it’s necessary to keep all the receipts from all the devices, items, and machines purchased for the needs of the business. On the one hand, this approach will enhance cost control. On the other hand, you’ll be able to track all your costs for your tax return and tax deductions.
4) Ensure presence in digital media
No matter what field your business belongs to, being present in digital media is a must.
For starters, you should launch business pages on Facebook and Instagram. It’s free of charge and these two social networks can help you generate leads and acquire new clients.
The second step, equally important, is to start your business website. As explained by the experts from a web design company in Houston, SMB-s that have a website improve their online visibility. In turn, this will increase conversion rates and potential sales, as well.
If possible, family-run businesses should create their own visual materials. From posting photos with proper hashtags to social media, to shooting explainer videos and tutorials. These are some inexpensive, yet practical ways in which such enterprises can ensure higher recognizability across digital channels.
5) Mind the personal life
While running a business together with your family is a financially beneficial thing, it can affect personal relationships within the family.
That’s why it’s necessary to define your working hours and the work mode, as well as your leisure time. If all the included family members constantly discuss business matters, they can experience collective burnout.
We’ve suggested above that family-run businesses should allow for a higher level of democracy in handling business operations. For instance, kids could assign tasks to parents, and parents could exchange their roles as chief managers of their business.
Still, when it comes to business negotiations, the family council should appoint one person to negotiate and bring the conditions before other family members. This model will ensure both democratic procedures within a venture, and a certain level of efficiency.
As for the leisure time, it would be wise to bring a decision by which it’s not allowed to talk about business with other family members after the end of the workday.
Running a family enterprise can be a great combination of joy and business for many families. Still, it’s not to be mistaken for fun and amusement, because business affairs need to be approached in a serious and professional way. That’s why, family members need to specify the decision-making procedures, as well as rules for negotiations with business partners. Together with proper asset management and digital marketing features, every family-run business can ensure high productivity and coherent management.