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12 Secrets From the Pros on Running A Family Business

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12 Secrets From the Pros on Running A Family Business

More than two-thirds of businesses worldwide are family-owned. So, if you run your print shop or distributorship with your relatives, you’re in good company, with brands like Ford, BMW and Tyson. While it’s a wonderful thing that family businesses power the economy and job market, the reality is that only 30% make it to a second generation, 12% endure into a third generation and a tiny 3% minority continue into a fourth generation, according to Family Firm Institute. If you’re curious aout the secrets of family business success, we’ve rounded up 12 tips from industry veterans that you should know about. 

1. Set clear family/work boundaries.

Successful family business owners know it’s critical to keep family and business issues separate. Heather Streible, co-owner at women-owned apparel decorating company, Replica Screen Printing (@replicascreenprinting), that she runs with her family in Cave City, KY, remembers once getting into a father-daughter argument at work. “He said, ‘I’m still your father,’ and I said, ‘Not until 4 o’clock, you’re not.’ That’s how we’ve created relationship boundaries. When we’re at work, you’re my boss and you’re my employee. Or, you’re my partner, not my mother. Family time starts when we’re at home or off the clock. It’s not always easy, but we make it work.” 

2. Divide roles and responsibilities based on everyone’s strengths. 

It’s important to give family members different areas of responsibility in your business to avoid conflicts. You can huddle togetherm when it comes to making big decisions, but getting involved in the minutiae of each other’s departments only slows things down. “For us, it works better when we have focused areas of what we do, so we’re not competing against each other,” Streible says. “For example, I work on graphics in the production area, and my mother works on accounting and accounts payables. We set up our offices so we’re in separate physical areas doing what we’re each good at. Then, we make big decisions together, like buying equipment or giving raises.” 

3. Learn (and respect) each other’s communication styles.

Wendy Lund Rossman, general manager of 11-year-old In Stitches Embroidery and Patch (@institchesemb) in Black Hills, SD, runs her business with her husband of 34 years and son. One of her biggest challenges is learning to communicate with each person in “their own language.” For example, she’s a self-proclaimed workaholic and morning person vs. her night-owl husband and son. “To be a better manager, I learned that when I give them jobs from our production schedule, they’ll handle it on their schedules, according to their work ethics. I also learned the value in not being a workaholic, “ she says.

Rossman’s husband, Mike, acts as the shop’s graphic designer. They’ve had to work out how shop employees take orders so he can create their custom art. “He’d tell me, ‘You’re not getting all the details I need to know to create the logo,’” she says. “Or, ‘you gave me 40 minutes to do this custom job, but it’ll take six hours.’” So the Rossmans worked together to develop a creative brief checklist and determine how long certain design tasks take. “Slowing down to do this improved our communication and decreased the tension,” she says.

4. Don’t be afraid to hire when you need help.

Many family businesses will try to “keep it all in the family,” rather than hiring new employees or consultants when they need extra help. Successful family firms know when to recruit for key positions, whether it’s another relative or outside talent. Bringing in new perspectives via non-family members can also give the business a reality check and jump-start growth. “When it’s not fun anymore or getting too time-consuming, hire people to help you,” says Rossman, whose goddaughter, Erin Hennig, and cousin, Ashley Linton, do her social media and blogging now. “Hire and train people before you get super busy, since there’s a learning curve to everything. Remember, lots of people want to work for a family business, so you have an edge in this job seeker’s market.” 

5. Treat your “family” business like a business, but treat your employees like family.

While “family” is an important aspect of a family business, long-term success depends on truly running it like a company. For example, don’t offer a family member a “sympathy job,” since employment with you should be based on the expertise they bring (not that they can’t find a job anywhere else). Plus, put all business relationships and job roles in writing, including duties, compensation and performance review procedures.

One of the charms of a family-owned business is that you can treat everyone like family, whether they’re your relatives or not. Family firms often treat customers like “family” as well, which keeps them happy and loyal. “90% of our business is referrals,” Rossman says. “We people like family, and they bring us more business and it compounds.”

6.  Treat family members fairly.

Relatives can be a huge asset to your business, but avoid taking advantage of them or anything that resembles favoritism. The way you assign pay, award promotions, create work schedules, and offer praise and criticism should be the same for family and non-family members. “We all sit down and say, ‘How is this area going to go forward? Is there an area that I should take over?” Streible says. “Communication is really key to keeping everything on an equal playing field.”

7. Make it optional for family members to join you.

Rossman encouraged her son, Wayne, to “spread his wings” at other jobs, in other industries, before deciding if he wanted to make a career out of the family business. “I’d never want to shove my dreams at him,” she says. “In fact, if he works at other companies, he’ll return to us as a better manager.” A good family business doesn’t require or guilt relatives into joining the shop. You want employees who are passionate about what you do, so giving them the choice creates a better foundation for their success. Some family business owners, like Rossman, encourage or even require children or other family members to get three to five years of outside experience first, before joining the family firm.

8. Revel in the benefits of a family-owned business.

Streible believes that no one cares about your business as much as your family. “At the end of the day, even if my mom and I disagree on something, I know what we decide will be the best choice for the shop,” she says. “Plus, it can be hard to get an employee to stay until midnight to finish an order, but I can always count on my dad to help screen print into the wee hours.”

Rossman started her business for a few reasons. First, her son Wayne was diagnosed with Asperger’s and she wanted to build a business to boost his confidence and leave him a legacy. Rossman herself started experiencing myopic macular degeneration at age 40 and chose to leave her job as an accountant. “Wayne started trimming threads and folding shirts at age 14, and now at 23, he’s our production manager,” she says. “In 2021, we hired more people and experienced 37% growth. We’re all doing this together.”

9. Involve your family unit in the firm vision.

Every year, the Rossmans create a vision board for their shop. Last year, they included their son Wayne in their discussion about whether or not to buy a new DTG printer. “We were kind of trapped in the allure of the ‘shiny, new piece of equipment,’” Rossman says. “However, we decided that instead we’d become more proficient at our current processes and outsource DTG for now. Wayne helped us decide on this big growth goal, and then we shared it with the rest of our staff. We all know what we’re working to make happen.”

10. Manage your cash flow responsibly.

Many family businesses, especially startups, struggle and stress over cash flow. “When you work for someone else, paying the company bills isn’t your problem,” says Rossman, who runs her business with cash. She tapped into her corporate 401K to buy their first embroidery machine. “We pay cash for everything, so we have no debt,” she says. “We watch so many other businesses buckle under debt.” While this may not be possible for all decorators and distributorships, requiring 100% upfront payment immediately improves your cash flow.

11. Work hard, but plan time off and away.

Whether your shop is home-based or close by, many owners work “24/7” because it’s difficult to totally walk away—especially when you’re starting out or in a rush season. “When your shop is in your basement, you have to learn not to work all the time,” Rossman says. “Part of growing a business is to learn what orders to take, and which to turn away if they eat away your time.” While some owners need to work lots of weekends, it’s important to schedule time away from work, both individually and as a family, so you can recharge and return to work with renewed energy. “When we work and play together as a team, the three of us are unstoppable,” Rossman says. 

12. Plan for your company’s future. 

At Replica Screenprinting, the team has an extreme focus on quality printing vs. many of their “ink-slapper competitors.” That’s why Streible and her family have started thinking about her mother’s retirement a couple of years down the road. “I’d love for her to be off more throughout the week,” she says. “Eventually, she’ll start stepping back, and we’ll either hire someone outside the family or I’ll take on more of her roles.”

If you want your business to become a multigenerational firm, create a financially sound family business succession plan before you actually need it. This includes retiring family members, and identifying talented employees and earmarking them for leadership roles in the future. If possible, hiring outside professional help to create a succession plan is definitely a smart investment.

Working with your family can be a rewarding experience, as long as everyone takes the necessary steps to make it work. Hopefully, these tips will help you fine tune your family business, and build it to last for generations to come.