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How To Make Your Family Business Work

How To Make Your Family Business Work

Everybody has come into contact with a family-run business at some point. Whether it be the local hardware store, a painting and decorating company, or your accountant, they exist in every sector.

There is no better way to pass on a legacy than to pass on your life’s work to your children. Though the questions are: is it really that simple to run a family business, and how can it be successful?

I chose to explore this issue as my sister and I are currently in a similar situation. But please note: though I will use the term family business throughout the article, the advice below applies to both businesses run by family and those run by friends, too.

Why would you want to start a family business?

So you’ve got a great idea for a business and you want to get it up and running, but you cannot do it alone. Who do you trust? Although family and friends may not have the right skills required for the job, there is already an ingrained sense of trust between you. This makes it much easier to share your ideas and research with them, and get started on building your dream. Skills can be much more readily learned than trust gained between two parties, especially at such an early stage in the development of an idea.

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From a different angle, a family business may be exactly what your relationship needs; a common ground that you can both talk about and share to build and develop a relationship that’s been drifting apart. Commercially, a family business also has a certain appeal about it. When you pop down to the local butcher and see “Michaels & Sons” over the door, you feel an instant warmth and connection towards the store. People in family-run businesses tend to value each other, their product, and their customers.

Another way family businesses can pop up is through a shared passion. You may be out having a drink, chatting away, when you both—mildly inebriated, maybe—consider the prospect of going into business together.

Hey, that’s a great idea! Why don’t we just get a little cash together, buy some stock, and just do it? It’ll be fun, and we can do it, no problem!

Many people have had a conversation similar to this but never get round to doing it, or question their optimism the day after. However, if the passion has not faded by the time you’ve recovered in the morning, then this shared motivation may be the perfect way to get the ball rolling. Having someone constantly inspiring you, and making sure you are doing what is necessary, can be a great benefit when starting out. Plus the added responsibility of another party makes the desire to succeed that little bit more important.

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There are also several logistical and financial benefits to family businesses. Family can provide you with low- or no-cost labor, helping maintain the day to day whilst allowing you to concentrate on expansion or development. Also, if ever in need of a short-term or quick loan, family or friends may be able to provide you with a low- or no-interest loan to keep you afloat. However, it is important to be careful with the latter, as these loans can make or break relationships.

What do you need to consider?

Now you have the idea, the hardest part is to put the whole thing into play. This is where the real blood, sweat, and family feuds start to take place. Be prepared for a bumpy ride because starting your own venture alone is a rocky process, and can be exacerbated by the inclusion of close ones. So, here are a few things that you should really consider:

1. Have you worked together before? Whether it be a school project a few years back, or a little charity stall to raise some money for the Scouts, if you have worked successfully and positively with the person before, that can make the whole journey a lot smoother. If you know each other’s traits, the best ways to communicate and delegate tasks, and even have complete faith in one another to deliver, it can be a huge burden of doubt relieved. If you haven’t worked together before, maybe just reflect on the last time you worked alongside someone and the issues you had or the things that worked well, in order to get an understanding of what is best for you all. If you both do something like this and go through the ideas with each other, it can lay the foundation for a healthy working relationship.

2. You clock in, you’re partners. You clock out, you’re family. This is the one that is often the hardest to overcome. In the end, you both have the desire and ambition to succeed with your idea—that’s brilliant. Though sometimes people can start to slack or lose passion. It is crucial to remember that you should be looking out for what is best for the company as well as yourselves. If you have some personal problems that crop up, make sure you highlight these and look for ways to address them: take a back seat and allow someone else to help out, or switch the tasks you do so that you can work more from home.

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However, there can come times when very difficult decisions need to be made, even to the point that considering the resignation of one member of the business, maybe even your own, is on the table. If it comes to this, it is important to highlight that it is not a personal decision and try to prevent damaging the relationship that existed prior to going into business together. This is obviously the worst situation one can be in, and hopefully you will never get into such an extreme position.

Fortunately, conflicts can often be resolved, depending on the relationship, and the ability to have such a lenient working environment can be very useful. For example, you could arrange between you flexible times of work that allow you to attend your weekly Pilates class, or pick the kids up from school.

3. Keep your finances in check. Everyone may be raring to get involved, and be adding to the investment fund to get the idea’s blood pumping. Make sure you consider not only the future of the business, but the future of yourselves. Where do your finances look to be six months, two years down the line? If the situation does not look good, then someone should probably consider a stable income external to the venture. By removing the burden of financial security from the venture, it allows for riskier growth strategies, greater flexibility within the company finances, and most importantly, peace of mind.

4. Take a break. You may be the best of friends, but there are going to be times when you need a break from each other. This is vital to retaining a healthy working and personal relationship. Perhaps schedule days where only one of you is in the office, or take a weekend away, refraining from all business calls and emails. Not only will this further develop the trust in your partner to lead and manage the venture, but it will also give you a break from each other and allow you time to reflect on other areas of your life. As much as you may enjoy the risk and reward of a venture, there are other areas of your life that need some attention, too.

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Now that you have done your homework, it is time to crack on with writing that business plan, and launching your idea. I wish you the best of luck with your endeavors, and would be pleased to hear any stories of attempts and—hopefully—success!

Featured photo credit: ThinkStock via i.huffpost.com

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Kerim Hudson

Unemployed

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Published on March 20, 2019

How to Write a Powerful Mission Statement for Your Business

How to Write a Powerful Mission Statement for Your Business

Have you ever felt lost in the minutia of your job?

As a business owner, I can relate to getting bogged down in the day to day operations of my business. Things like inventory, payroll, scheduling, purchasing and employee management take up the bulk of my day.

While these things are important and need to get done, focusing too much on the details can make you lose sight of the big picture. This is why having a good mission statement comes in handy.

What is a Mission Statement?

Put simply, a mission statement is an internal document that provides a clear purpose for the organization. It provides a common reference point for everyone in the organization to start from.

In other words, after reading your company’s mission statement, managers and employees should be able to answer the question “What are company’s main objectives?” For example, Southwest Airlines mission statement reads:[1]

“Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit. We are committed to provide our Employees a stable work environment with equal opportunity for learning and personal growth.”

In this single statement, Southwest conveys the company’s goals of providing the highest level of customer service as well as providing a good working environment for their employees.

Mission Statement VS. Vision Statement

While the mission and vision statements are related, there are subtle but distinct differences the you should be aware of.

First of all, a mission statement is designed primarily as an internal company document. It provides clarity and direction for managers and employees.

While there’s nothing wrong with sharing your company’s mission statement with the outside world, its intended audience is within the company.

While a mission statement provides a general framework for the organization, the vision statement is usually a more inspirational statement designed to motivate employees and inspire customers. Going back to Southwest Airlines, their vision statement reads:[2]

“To become the world’s most loved, most flown, and most profitable airline.”

This statement inspires good feeling from the customer while motivating the employees to achieve that vision.

What Does a Good Mission Statement Look Like?

When coming up with a mission statement, it’s important to take your time and do it right. Too often, people (especially entrepreneurs) just write down the first thing that comes to mind and they end up with worthless or (worse yet) a generic mission statement that is utterly useless.

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Remember, a mission statement should provide a common framework for everyone in your organization.

When writing a mission statement, you should always try to incorporate the following;

  • What we do?
  • How we do it?
  • Whom do we do it for?
  • What value are we bringing?

Now, you can see how tempting it is to just come up with something generic that ticks off those four boxes. Something like “We provide the best widgets available online for the consumer.”

After all, that did check off all the boxes:

What we do? Provide widgets.

How we do it? Online.

Who do we do it for? The consumer.

What value we bring? The best widgets.

The problem with this mission statement is that it could apply to any number of companies producing the same widget. There is nothing to distinguish your company or its widgets from any of your competitors widgets.

Compare that mission statement to this one:

“We provide the highest quality widgets directly to the consumer at an affordable price backed up with a 100% satisfaction guarantee. If our clients aren’t 100% satisfied, we’ll make it right.”

What’s the difference?

Both mission statements answer all the same questions of what, how, whom and value. But in the second statement, they are differentiating their company from all other competitors by answering the question “what makes us unique”.

Another way to read that is, “Why you should buy from us.” In this example, it’s because our widgets are of the highest quality and we stand behind them 100%.

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You might have noticed the statement didn’t say that we sell widgets at the lowest possible price. That’s because we are emphasizing quality and satisfaction over price.

A different company’s mission statement may emphasize selling widgets at the lowest possible price with little to no mention of a guarantee.

Hallmarks of a Good Mission Statement

1. Keep It Brief

Your mission statement should be no longer than three sentences. This is not your company’s magnum opus.

You should be able to distill the what, how, who and why questions into a succinct message.

2. Have a Purpose

A company’s missions statement should include the reason it even exists.

Make clear exactly what the company does with statements like “We strive to provide our customers with …….”

3. Include a “How”

Take this as an opportunity to differentiate your company from its competitors.

How do you provide a product or service that’s different or better than how your competitor provides it?

4. Talk About the Value You Bring to the Table

This is where you can really set yourself apart from the competition. This is the “why” customers should buy from you.

Do you offer the lowest prices? Fastest delivery? Exceptional customer service? Whatever it is that sets you apart and gives your particular products, services or company an advantage talk about it in the mission statement.

5. Make Sure It’s Plausible

It’s okay to shoot for the stars just to settle for the moon, but not in a mission statement.

Being overly ambitious will only set you and your employees up for failure, hurt morale and make you lose credibility. You will also scare away potential investors if they think that you are not being realistic in your mission statement.

6. Make It Unique and Distinctive

Imagine if someone who knew nothing about your business walked in and saw how it was operating, then they read your mission statement. Would they be able to recognize that mission statement was attached to that business? If not re-work it.

7. Think Long Term

A mission statement should be narrow enough so that it provides a common framework for the existing business, but open enough to allow for longer term goals. It should be able to grow as the business grows.

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8. Get Feedback

This is very important, especially from managers and employees.

Getting their input can clarify how they currently see the company and their role within the organization. It’s also a good way to get people “on-board,” as studies show that people are more likely to go along with an idea if they feel included in the decision making process beforehand.

9. Review Often and Revise as Necessary

You should review the missions statement often for two reasons.

First, as a reminder of what the essence of the company is. It’s easy to forget when you are in the day to day grind of the business.

And two, to make sure that the mission statement is still relevant. Things change, and not everything can be anticipated at the time a mission statement was written.

For example, if a mission statement was written before the advent of the internet, a company that use to sell things door to door now probably has a website that people order from. You should always update the mission statement to reflect these changes.

The Value of Mission Statements: Why Go Through All of These in the First Place?

It may seem like a lot of work just for a few sentences that describe a company, but the value of a well written mission statement should not be discounted.

First of all, if you are an entrepreneur, crystallizing the what, how, whom and value questions will keep you focused on the core business and its values.

If you are a manager or other employee, knowing the company’s basic tenants will help inform your interactions with both customers and colleagues alike.

Strategic Planning

A relevant mission statement acts as a framework for strategic planning. It provides guidance and parameters for making strategic decisions for the future of the company.

Measuring Performance

By having the company’s mission in a concrete form, it also allows for an objective measurement of how well the organization is meeting its stated goals at any one time.

Management can identify strengths and weaknesses in the organization based on the criteria set forth in the mission statement and make decisions accordingly.

Solidifying the Company’s Goals and Values for Employees

Part of a well run organization is nurturing happy and productive employees.

As humans, we all have an innate need for both purpose and to be part of something larger than ourselves. Providing employees with a clearly defined mission statement helps to define their role in the larger organization. Thus, fulfilling both of these needs.

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Now I’m not saying that a mission statement can overcome low pay and poor working conditions, but with everything else being equal, it can contribute to a happier and more productive workforce.

To Hold Management Accountable

By creating a mission statement, a company is publicly stating its highest values and goals for the world to see. By doing so, you are inviting both the public and your employees to to scrutinize how well the company lives up to its ideals.

So if you state that you only provide the highest quality products, and then offer something less, it’s fair for both the public and the employees to question, and even call for a change in management.

If management doesn’t take the mission statement seriously, no one else will either; and the legitimate authority that management rely’s on will be diminished.

To Serve as an Example

This is the opposite side of the coin from the previous statement. If the highest levels of management are seen taking the mission statement seriously and actively managing within the framework of the statement, that attitude filters down throughout the organization.

After all, a good employee knows what’s important to their boss and will take the steps necessary to curry favor with them.

Finally, use the company’s mission statement as a way to define roles within the company. You can do this by giving each division in the company a copy of the mission statement and challenge the head of each division to create a mission statement for their respective departments.

Their individual mission statements should focus on how each department fits in and ultimately contributes to the success of the company’s overall mission statement. This serves as both a clarifying and a team building exercise for all parts of the organization.

Final Thoughts

Developing a mission statement is too often just an after-thought, especially for entrepreneurs. We tend to prioritize things that we perceive will give us the biggest “bang for our buck.”

Somehow, taking the time and effort to sit down and think seriously about the what, whom, how and value of our business seems like a waste of time. After all, we got in the business to make money and become successful, isn’t that all we need to know?

That mindset will probably get you started okay, but if you find yourself having any success at all, you’ll find that there really is such a thing as growing pains.

By putting in the time and effort to create a mission statement, you are laying the groundwork that will give you a path to follow in your growth. And isn’t building long term success what we are really after?

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Featured photo credit: Fab Lentz via unsplash.com

Reference

[1] Southwest Airlines: About Page
[2] Fit Small Business: 10 Vision Statement Examples To Spark Your Imagination

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