“We’re just a small family business, we don’t need a lot of systems.”
As an entrepreneur with businesses on both sides of the family tree, I’ll admit, this question — of whether a family business need systems — stumped me for a long time. After all, family businesses are usually composed of employees who know each other well, communicate all the time and have a different set of challenges than other companies.
Yet those same benefits can be all the more reason to create systems that help your family-owned business run with less friction, preserving your relationships and assets in the process.
Here are my top three reasons why family businesses need systems:
No. 1 Systems Stop Special Treatment
Call it a disagreement, difference of opinion or power struggle, but family-owned businesses are no less likely to have challenges about how things are run than any other company. In some cases, it’s worse because everyone wants to have their opinion heard and validated, which is great, unless you have family members doing their own thing instead of presenting a united front.
This discord can often show up as someone who is constantly late for a shift or who takes long, unplanned vacations and gets away with that behavior because the boss is family.
Imagine one person on the sales staff giving huge discounts or bonuses to clients because “my dad’s the owner,” which then throws your inventory and accounts receivable into chaos. Family members who make up their own rules can cause confusion, chaos and conflict.
Systems allow you to have a standard way of operating and you can begin by documenting how you run your business in an online operations manual.
No. 2 Better Communication Stops Conflict
In a family-run business you’ve got to be careful about what you say and when you say it. Casually discussing business over a family dinner could have far reaching consequences during your 9-to-5. We all like to muse and discuss changes that might, happen but thinking about a new policy doesn’t mean it will come to fruition.
Written systems allow you to clearly communicate exactly what you want done, which prevents the back and forth of “he said, she said” and gives you a clear line of what’s being decided as the owner of the business.
If you’re considering closing your restaurant for lunch, as business has been slow, you wouldn’t want that news spread around until you were ready to inform the staff and make the appropriate announcements. Even something as simple as your business hours should always be communicated to the entire company — not just those who share your last name.
No. 3 Family Businesses are Not Always Family-Only Endeavors
It’s likely at some point that you’ll bring in employees outside your direct family whether to handle special projects like taxes or your website, or as the company grows. Having a resource to share how things are done is essential if you want these employees to succeed. No one should have to ask Junior for help doing their job because only the family knows how things are run.
Have you ever considered taking the whole family on vacation and want the business to keep running (and making money) while you’re gone? Then you need systems.
Sure, you can keep that secret blend of herbs for your chicken secret or protect your business rolodex from outsiders, but sharing the guidelines for customer service or client onboarding is just smart business.
Eventually, even if it seems like an impossibility, you may want to sell your business, as several of my family members have done. Since you won’t be selling your family along with it, you need to have these systems in place if you want your business to be a valuable asset.
Family businesses are a beautiful thing but they’re no less susceptible to conflict, confusion or employee turnover than other companies. Building the right systems for your family business ensures that it can continue to thrive without threatening your home life and personal relationships.
Stella Premo, executive director of the Capital Region Family Business Center based in Roseville, offers her insight into how her organization works to better serve the unique challenges of family businesses.
One thing that makes my job so interesting is that Comstock’s isn’t a publication solely focused on disseminating information in the form of news briefs and factoids. We tell stories: of the struggle to succeed, thrills of success, heartbreaks of failure and the quiet fear of finding oneself at a crossroads.