A family business has huge advantages. Family members tend to share common values and have a strong commitment to making the business a success.

They are happy to put in the extra mile to build a lasting legacy. They may even be prepared to make financial sacrifices for the sake of the business. Above all, strong personal bonds means that family members stick together through thick and thin and have the determination to grow the business.

But it isn’t always all plain sailing. Running a successful family business isn’t without its challenges.

We spoke to John McAuliffe, Managing Director of successful Wolverhampton-based environmental contractor firm, McAuliffe Group about his experiences of being at the helm of his family business that specialises in brownfield site transformation for housebuilders and property developers.

John says: “One of the most important things for me when running the business with my family is not to be constantly stepping on each other’s toes. It has been key to make sure everyone has their own area of the business to look after – preferably roles they enjoy and that play to their strengths. I relish the challenge of being MD, balancing the financial and commercial objectives of the business, while other family members, who are major shareholders and board members, much prefer to be out on the road, working on the operational side of the business.”

Of course, differences of opinion and conflicts can arise in any business but things can get even more fraught when family dynamics are involved. John advises that the answer here is to separate business and family life.

He explains: “It can be easy to get bogged down with issues. Disagreements are inevitable. But you’ve got to be rationale and solve problems logically. Family politics have no place in the boardroom. You’ve got to let your head make the decisions, not your heart. At the same time however, blood is thicker than water and you should never allow business conflicts to get in the way of family relationships.”

Family business advice

  1. Keep business and family life separate. Set some boundaries and stick to them. Try to limit the number of business-related conversations outside the workplace.
  2. Talk regularly. Make time on a regular basis to talk about the business in a structured way. Differences of opinion are inevitable but consider weekly progress meetings to resolve any issues.
  3. Have clear roles. Remember the old saying ‘‘too many cooks spoil the broth’. Give each family member a defined role with specific responsibilities reflecting their strengths. This helps reduce conflicts.
  4. Put everything in writing. It can be tempting to be informal when running a family business. But this can result in ambiguity and misunderstandings. Instead, make sure that everything – from dividends to succession planning – is documented and filed.
  5. Set up management reporting lines. It’s not fair to employees if they are ordered around or reprimanded by family members who they don’t report to. This only breeds resentment. Draw up clear reporting guidelines and stick to them.
  6. Be as professional as possible. This means treating family members and non-family employees as fairly as possible. Avoid allegations of favouritism or nepotism with consistent pay levels, bonuses and commercial targets.
  7. Keep an open mind. It can be easy to get set in your ways because that’s the way things have always been done. Don’t be too proud to welcome a great new idea. That younger member of the family might just be on to something. You won’t know unless you give it a go.
  8. Seek external support. Running a family business can be all-encompassing. It can be hard to see the ‘wood from the trees’. Getting outside advice can help to bring fresh thinking and a new outlook to the table. You might want to consider business coaching to inject new ideas or solve internal issues or disputes.
  9. Training matters. No matter how capable family members and employees are, there is always room for improvement. Invest in training and/or professional development to improve skills, build confidence, increase motivation levels and grow the business.
  10. Have a succession plan in place. None of us knows what is around the corner. Without a formal succession plan, the business’s fate is uncertain. It could be left in the hands of a Court. Putting a plan in place now could prevent disruption to the business and serious family disputes.

By Sue Higgins, MD & Founder of Inspira UK