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BUSINESS MENTOR Running a successful FAMILY BUSINESS BY CHRIS ELPHICK here are lots of good reasons to go into business with your partner, spouse, a family member or a friend. But the things that can make a family business successful – familiarity, affection, unity and a shared purpose – can also cause problems. If you're working with your partner, a relative or a friend, it's easy to take each other for granted and let business concerns spill over into your personal lives. If things do go wrong, the consequences can be serious. Falling out with a business partner is never easy; falling out with your spouse, family member or closest friend can be devastating. Remember, when it comes to running a business, you are a business first and a family – or couple – second. That means the usual business systems and processes need to be in place. Despite knowing each other well, written agreements and clear rules are necessary. These provide "insurance" to prevent emotions from sabotaging your business. Laying out the ground rules: First, develop a written agreement specifying how the business will run. Ideally, get a lawyer to check and witness this. Things to include are: • Who does what – everyone needs to have clear roles that don't overlap. • Working hours. • How much you will pay yourselves. • Who has the authority to deal with money. • Who has responsibility for day-to-day financial records and book keeping. • How to deal with health and safety issues. • Appointment of professionals, including an accountant and a banking or financial adviser. Develop a business plan. This is a map that helps you go from A to B, chart your progress and keeps you on track. A business mentor can help you prepare a solid plan. For more information about how to write a business plan visit www.chriselphick.co.nz or www.business.govt.nz T DEALING WITH CONFLICT Conflict is inevitable when you're in partnership running a business. If your partner is also family it can be hard to maintain the necessary restraint – familiarity really can breed contempt. When conflicts arise, remain business-like. Deal with conflict in the same way you would in a non-family business by: • Addressing the issue openly and constructively. • Applying transparent processes to resolve problems; this is where a written agreement can come into its own. If agreement can't be reached, consider outside mediation – such as your business mentor or a professional mediator. To find a mediator, contact Leadr, the Association of Dispute Resolvers, www.leadr.co.nz unfairly treated. This is where written agreements and clear rules are also important. If everyone knows what they are meant to be doing and what's expected of them, you can avoid accusations of unfairness or favouritism and get the most out of your staff. SEPARATING YOUR BUSINESS AND YOUR PERSONAL LIFE One of the biggest pitfalls of running a family business is that it's easy to blur the boundaries between your business and your personal life. If you're in business with your spouse, it can be hard to stop talking about work when you're at home. If you are also working from home, then this can be further compounded. But even if you don't live with your business partner, if they're family it's very easy to let work life spill over into family life. Right from the start, set aside time for non-work activities and keep business related matters within business or agreed hours. If you're working with your spouse, go out for dinner or to a movie and resist the temptation to talk about work. If you're in business with another family member, hold regular meetings during work hours so that you don't talk business at family gatherings. THE IMPORTANCE OF SUCCESSION PLANNING One of the biggest issues family businesses have to deal with is succession planning – who will take over once the person running the business wants to stop. This is particularly important for businesses comprising several generations of the same family – typically a parent and their adult children. Similarly, if you are a couple in business together it's worth thinking in advance how the business would continue to run in the event that one of you is left to manage it singlehandedly or at short notice. Start thinking about succession planning early. Don't wait until you, your partner or the older family member is no longer capable of running the business. Agree well in advance when the handover will occur. They don't have to leave the business entirely; they could remain in an advisory role. Agree on who will take over the business. It doesn't have to be a family member who takes over responsibilities – sometimes an experienced outsider is a better choice. Gather and record all the information and knowledge you, the older person or business partner has accumulated during their time in the business. Write down what they do and how they do it, so that everyone can access the information. This can prove invaluable for ensuring a smooth transition to the new management so that the focus remains clearly on the business – your customers and the provision of services. BRINGING IN A NON-FAMILY MEMBER As your business grows, you may employ staff who is not family. Being the only non-family member in a family business can feel a bit like joining a secret society. Turnover of non-family staff members in family-owned businesses tends to be high, often because they can feel unwelcome or Chris Elphick is a Wellington-based business mentor, coach and trainer working throughout New Zealand and the Pacific with a range of business enterprises. For more business tips and information visit: www.chriselphick.co.nz SEPTEMBER/OCTOBER 2013 ■ NZ AQUACULTURE ■ 11