It’s hard enough to co-exist peacefully in a family. Add the demands of running a business, and things get REALLY complicated! Family businesses face all the “ordinary” business challenges, PLUS the added complexity of family dynamics – personality types, different ways of doing business and various levels of need for control. This makes running a family business the ultimate test of work / life balance.

Decisions you make around the boardroom table can have long-lasting implications for your relationships around the dining room table.

However, with planning and forethought, a family business can also be the ultimate source of abundance and freedom for your family. To do this, there are three critical components every family business needs to address:

1. Know What You Are About – Your Vision and Values

The purpose of a business, according to Wikipedia is to “earn profit to increase the wealth of their owners.” For a family business, the reasons for starting a family business can be more personal, closer to the heart: to fulfill a dream, support the family, leave a legacy, afford your children more advantages and support community.

The first key to family business success is getting clear on what the vision and the values the family holds as individuals, as a family and how those integrate with the vision and values of the family business. This is especially important when there are members of different generations running the business together, whose differences in their outlook on life have the potential to create misunderstanding and conflict.

Some key questions to ask to define the vision and values:

What matters most as individuals, as a business family and a family business? (time, team and money)

How do we see the future?

What are our expectations for ourselves and each other?

What does it mean to be a family?

What does our home environment look like?

What do we want our legacy to look like?

2. Manage Conflicts

Conflicts in any business are inevitable. In the family business, the issues that come up are not “just business”. They’re often personal and have the potential to negatively impact family relationships and undermine the health of the business. The goal is not to avoid conflict, indeed conflict often brings forth new ideas and growth, but to have an effective and agreed-upon strategy for dealing with conflict as it comes up.

Key questions to ask to manage conflict successfully:

What are the ground rules for communicating with one another?

How do we address and resolve conflict

What are our standards of behavior?

What is our process for decision-making?

How do we share information with each other?

3. Have Solid Systems

In a start-up or young family business, informal policies and procedures work fine. Everyone is working closely, you’re excited and you know each other well enough that things “go without saying”. However, as the family and the business grow, having formal policies and procedures create healthy boundaries, provide a framework for solving conflicts and help the business grow.

Some of the basic structures and procedures your family business should have in place are:

– A Board of Directors

– A Family Council and procedures for Family Meetings

– Written policies and procedures that outline issues of shareholder arrangements, compensation, employment contracts, succession and transition, team building, management and strategic planning.

Questions to ask when developing policies and procedures:

Where we are going?

What are our goals?

How are we going to get there?

Who is responsible for what?

What are the time lines?

When and how do we evaluate our progress or lack of it?

What do we do if the unexpected happens?

By effectively addressing these three key components you can design your family business to run smoothly and competitively and provide your family the abundant harmonious lifestyle you imagine.