How to Manage the Challenges of a Family Business

Working with your family can present some unique challenges and opportunities. Here are four tips to keep you sane.

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By Lisa Evans


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For the millions of family businesses operating in the United States, having little separating the dining table from the board room table can be the recipe for not only a family feud but also for business strife. Rachel Shelasky is the president of Hollywood Fourth, a New York-based, fourth generation custom clothing design company. While Shelasky's siblings decided to pursue other career interests, the 33-year-old works alongside her father, Edward, and says she enjoys being part of something her great-grandfather started in 1907.

San Francisco-based family business counselor Karen Calcango says while the knowledge passed down through generations can be the business' strength, family-run businesses can present some unique entrepreneurial challenges including improper delegation of duties, undefined roles and responsibilities and familial relationships that pull at emotions and can cause bad business decisions.

Related: 10 Questions to Ask Before Family and Friends Become Business Partners

If you are in business with your relatives, follow these tips to make your family-run business thrive.

1. Play to each family member's strengths. Calcango says establishing boundaries and having clearly defined roles, responsibilities and authority can determine whether a family business will succeed or fail. "In a family business, order is even more important than it is in any other kind of business because you have two things that pull at you constantly," she says.

While Shelasky handles the design and client acquisition side of the business, her father handles the bookkeeping and runs Hollywood Uniforms, the parent company of Hollywood Fourth. "I work with a lot of very hip companies like food trucks and cookie companies," says Shelasky, while her father makes uniforms for doormen and church robes -- work Shelasky calls "the boring stuff."

2. Keep personal matters out of the business. Family members typically have insight into each other's personality and thought process that non-related business partners wouldn't have, making crossing the professional line into personal terrain tempting. While lashing out at a co-worker wouldn't have been thinkable in her corporate positions, Shelasky admits it's easier to lose your cool when there's a personal relationship involved. "You say things to your parents that you wouldn't say to anyone else," she says. Leave your emotions at the door and remember your family members are your co-workers when you're at the office.

3. Be understanding of the generational divide. While Shelasky and her father have a great relationship, both agree the generation gap can create some tensions. "My father still uses a 1950s typewriter to print invoices, so sometimes he has to do it five times because he misses a letter and I ask 'why don't you just do it on the computer?'," says a frustrated Shelasky.

The generational differences can create some challenges, but Shelasky appreciates the wisdom her father brings to the business and says the old and new ways of doing things create a balance that clients find appealing.

4. Separate personal from professional time. While ideally acting as a family at home and professionals at work, most family-run businesses operate on both levels at all times. "The business has to be run in a different way than the family is run," says Calcango, who recommends setting time limits on business discussions at the dinner table to allow everyone involved a break from their respective jobs.

Although Shelasky no longer lives at home, she says she often flees to a coffee shop to avoid working in the family office building. "It's just too much [together time]," she says, although she admits that she values the close relationship she now has with her father since working for the family business and wouldn't trade it for another corporate job.

Related: How I Raised a Family of Entrepreneurs

Lisa Evans

Lisa Evans is a health and lifestyle freelance journalist from Toronto.

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