7 Tips for Growing a Successful Family Business

Sure, working with family can be a mixed bag. It’s rewarding and challenging. Familiarity between the players can be fun; conversely it is the same thing that can cause less than diplomatic interactions. But according to the Harvard Business Review (HBR) public companies are “losing their share of America’s GDP, workforce, and assets” to family businesses.

Successful family businesses have characteristics that can be studied and mimicked. Did you know that Walmart is one of the most successful family businesses? It all started with Sam Walton who opened Walton’s 5&10 in the downtown square of Bentonville, Arkansas. It was so successful he and his brother Bud opened their first Walmart in 1962 in Rogers, Arkansas. The rest is history.

Wal-mart hybrid truck
photo credit: Walmart / Flickr

How did they do it? One of his most famous quotes sums it up, “If we work together, we’ll lower the cost of living for everyone… we’ll give the world an opportunity to see what it’s like to save and have a better life.”

The word “we” is the keyword in Sam’s quote. Family businesses that are egocentric and focus solely on the CEO’s vision are shortsighted and rarely make it to the end goal. You’ve probably heard it 100 times before – there is no “i” in team, right?

1. Shared vision

Smart leaders know the importance of getting the input of other key family members who work within the company. To sidestep any unnecessary debates, put everything in writing. If you haven’t already developed a business plan, this is a perfect time to get family members involved. Start with the company’s mission and then delegate different parts of the plan to the others. Then put it all together and discuss the details. Review the plan every quarter and revise it annually – together.

Family business meeting

2. Give every family member a great image to live up to

That comes from an old Dale Carnegie adage that still holds true today: “Give people a fine reputation to live up to.” This is especially important when working with family. Everyone seems to know one another’s flaws and insecurities and rarely remembers to comment about the person’s assets and contributions. Find a few positive adjectives to describe each person and use those words of praise frequently. Your team will be inspired to live up to that image and it will create a new upbeat standard for everyone.

3. Avoid including family members just to be “nice”

Business is business and family is family. Only include family members who have the skills required to get the job done. I once worked for a broadcast network and the Executive Vice President brought in his bored brother Gary to work in my department, Network Communications. Well, needless to say within weeks everyone in the 10-person department got derailed because Gary didn’t have any marketing or communications skills. So he was basically a disruptor and not in a good way. I will repeat, never offer a position to a family member that no skills to contribute. You wouldn’t do that with a friend or stranger, right?

4. Provide additional training

When every family member comes to the table with applicable skills, be prepared to provide additional training. If the mutual desire is to be the best in your industry, then be ready to shell out expenses for keeping everyone on the leading edge. What was exceptional three years ago is likely passé today so do what’s necessary to remain on the leading edge.


5. Teamwork vs. Organizational Chart

Every company should have a semblance of an organizational chart. It’s one of the key ingredients of a business plan. Yet, the chain of command is important only in situations that require a final decision. Everyone in the family needs to understand that when there are split decisions and opinions, the final vote will come from you. Other than those types of situations which are hopefully rare, teamwork is the name of the game. Did you know that some companies don’t even give their employees titles anymore?

6. Cross-training and ghosting breeds understanding

Even in the closest of families, people often feel their job is the most difficult. The truth is that every job is important and has difficulties attached to it. The best way for team building is to make sure everyone has a keen understanding of what the others do. Take time out for cross-training or allowing each person to ghost another for a couple of hours. The more everyone knows about each facet of the business, the more successful it will become. Knowledge is power, right?

7. Celebrate your wins together

Too often, in today’s world, people share their wins with social media more than with their co-workers. There is little team value in that and surely doesn’t enhance team spirit. Come up with a few ideas on how best to celebrate everyone’s wins. A bottle of champagne, a Happy Hour, an outing – select whatever will provide enjoyment for the group. Lisa Krikawa, founder of family-owned Krikawa Jewelry, shares her list of ideas in advance. So when anyone on the team creates a successful project, they all take part in the celebration. “I think of us as the Dream Team, as we are all committed to creating one-of-a-kind masterpieces for clientele all over the world. Each team member plays an important part in this synergy. We are always rooting for one another.”

Family members running a hardware business

There are no guarantees on success from any tips or advice. If some family members are hard to deal with or temperamental, simply don’t invite them into the business. There is more than enough to deal with in any business, without adding familial baggage. However, if you have a family member or team that has skills or knowledge in areas you don’t, then it can be a pleasurable and fulfilling way to develop a business.