10 Rules For Family-Run Businesses

10 RULES FOR FAMILY-RUN BUSINESSES

by Catherine Oak

Family businesses can be a blessing or a disaster. The root of a well-run family business depends on treating it like a business, not as an extension of the family. Here are ten guidelines that successful family businesses practice.

1. Have the family member work somewhere else first.
2. Don’t expect more or less of them than you would of any other employees.
3. Don’t create a job for a family member.
4. Keep family and business issues separate.
5. Keep open lines of communication.
6. Never leave the business to two people (family members or not) on the basis of 50/50 ownership.
7. If possible, develop an organizational chart that has family members reporting to people other than you or  other family employees.
8. Create a board of directors that includes non-family members.
9. Make family members pay for ownership, even if it’s at a discount.
10. Make sure all participating family members agree to these guidelines.

Catherine Oak is a principal with Oak & Associates (Glen Ellen, CA), an agency management consulting firm. You can reach her at Oak & Associates, P.O. Box 2047,Glen Ellen, CA 95442; (707) 935-6565; e-mail: [email protected]; Web site: www.oakandassociates.com.