How to start a family business
Family businesses are one of the most powerful economic impacts of a country, since more than 60% of all businesses are family-owned. This type of organizations have clear advantages over companies forged by a single person or partners outside their circle. These advantages are usually the pillars that sustain this type of company and allow them to achieve success: trust, affection and continuity. However, they are not the only aspects that should be taken into account when creating a business of this caliber. Keep reading this article and discover how to start a family business and achieve success.
When a family group has a business idea and decides to carry it out, they begin to raise doubts about how to organize the company, how to get financing, what kind of legal form they are most interested in, etc. In order to start solving these questions, the first thing to do is a general business plan . But what should be included in this planning? The first aspect that the family must identify is the type of activity it will develop. Establishing clear objectives is essential to start a project. Determine the number of partners, tax obligations, Social Security scheme, liability to third parties and tax obligations must be present to fix the organization of the family business .
Once the activity is set, the risks and opportunities must be assessed. For this, it is essential to carry out an exhaustive market study . In this analysis we must observe the state of the current market in which the activity that is thought to be developed is classified, examining the degree of supply and demand and, above all, thoroughly studying both the competition and the target audience. After conducting this study, the family must question whether their project is viable or not.
Financing is a vital aspect so that the project can move forward, so that, in this business plan, the financial availability of the family group should be analyzed.
After establishing the business plan, it is time to start making decisions. Regardless of whether it is a family business or not, every business must determine which legal form interests you. The selected formula must be focused on family control over decisions and ensure the continuity of the company through the following generations. Depending on the size of the company, the number of partners, financial needs, etc., the family must decide whether they constitute a Limited Company, Limited Company, Civil Society, Cooperative Society, etc.
Once the legal formula has been selected, the social bodies that will direct the company must be established. This step should be closely related to the type of society that will be developed, since each one works in a different way. In any case, the family group must determine the rights of each of the partners, establish a General Meeting of Members or Family Board, create a Family Council, select the administrators, choose the people in charge of the annual and monthly accounts of the company and mark the Family Protocol.
In order to organize the family business correctly and ensure its continuity, the family protocol must be clearly determined. In this sense, it is essential to create a Monitoring Committee of the Family Protocol that is exclusively dedicated to resolve differences and doubts about the interpretation and practice of said protocol. Normally, this committee is made up of three members of the Family Council.
When starting a family business, the generational succession is one of the most important elements that must be taken into account. In order to ensure the continuity of the family business, the most appropriate candidate must be selected to take control of the management of the company when the current leader decides to retire.
In all companies, conflicts arise during the decision making or management of the project. Therefore, when trying to start a family business it is important to establish a conflict resolution plan . The family group will have to opt for the method that best suits them, arbitration system, mediation or neutral evaluation.
When starting a family business, marketing and disseminating your product are key elements to ensure your success. Thus, it is convenient that some of the people in the family group be responsible for making their business known to the market and reach their target audience. To do this, you must make a marketing plan and determine the strategies to follow.
A family business can not start without a good financing system . In addition to the capital available to each member of the family group, other options must be weighed, especially when such financial availability does not cover all expenses. When a project starts, the investment is always greater than the benefits. The advantage of family businesses is that, once they begin to generate economic gains, these are within the family nucleus and it is customary to follow a financing policy based on reinvestment, in order to ensure the growth and development of the company .
Establishing a good family business organization from the beginning is essential to ensure success and continuity over time.