A Step by Step Guide To Managing a Family Run Business
This guide will walk you step by step through all the essential phases of managing a successful family owned business. No small business is easy to manage, and this is especially true in a family business. It is subject to all the problems that beset small companies plus those that can, and often do, arise when relatives try to work together.
This book will show you exactly how to initiate and maintain sound family business management practices. It describes what is to be done and under what circumstances in order to prevent some of the confusion and conflicts that may be perpetuated by self centered family members. Such relatives sometimes regard the company as existing primarily to satisfy their desires.
Here's what’s in the book:
~ 25 essential family business strategies - complete, step by step instructions, this is must-know must-do information; ignore it and you stand a good chance to fail. You get specifically designed instructions for each strategy.
~ Understanding the family business - gain deep understanding of what makes a family business tick. Important factors that you must be aware of that will keep you from costly mistakes when managing a family business.
~ How to balance family and business goals - an amazingly simple, low cost technique that will make your family business so much more effective and efficient.
~ Common problems in managing a family business and how to solve them - This topic alone will save you many times the cost of this book
~ How to choose a successor
~ All these and much much more.
Table of Contents
1. Essentials of Family Run Business Management
2. Understanding The Family Business
3. How to Balance Family And Business Goals
4. Common Problems in Managing a Family Business and How to solve Them
5. How to Choose a Successor
6. Family Run Business Assessment
7. Family Business Strategic Plan
8. How to Improve Your Leadership Skills
No small business is easy to manage, and this is especially true in a family business. It is subject to all the problems that beset small companies plus those that can, and often do, arise when relatives try to work together.
The family member who is charged with managing the family business company has to work at initiating and maintaining sound management practices. By describing what is to be done and under what circumstances such practices help prevent some of the confusion and conflicts that may be perpetuated by self centered family members. Such relatives sometimes regard the company as existing primarily to satisfy their desires.
The questions in this checklist are designed to help chief executive officers to review the management practices of their small family companies. The comments that follow each question are intended to stimulate thought rather than to include the many and various aspects suggested by the question.
Is executive time used on high priority tasks?
The time of the owner-manager is one of the most valuable assets of a small business. It should not be dribbled away in routine tasks that can be done as well, if not better, by other employees. Never lose sight of the fact that you as owner/manager, have to make the judgments that will determine the success of your business. You may want to run a check on how your time is used. You can do so by keeping a log for the next several weeks. On a calendar memorandum pad jot down what you do in half hour or hour blocks. Then review your notes against the questions: Was my time spent on management tasks such as reviewing last week's sales figures and noting areas for improvement? Or did I let it dribble away on routine tasks such as opening the mail and sorting bills of lading? You may want to ask your key personnel to run the same sort of check on their time.
Do you set goals and objectives?
Goals and objectives help a small company to keep headed toward profit. Goals and objectives should be specific and realistic. In addition they should be measurable, time phased, and written. List your goals and objectives by writing them out for your present successful operations. Objectives that are written out in straight-forward language provide a basis for actions by your key personnel. For example, state that you will sell certain number of units this year rather than saying you will increase sales.
Do you have written policies?
Flag this question and return to it later. Working through this checklist should suggest changes that may be needed if you have written policies. By the same token, your business will provide input for writing out policies if there are none in writing.
Is planning done to achieve these goals and objectives?
In a sense, planning is forecasting. An objective, for example, for next year might be to increase your net profit after taxes. To plan for it you need to forecast sales volume, production of finished goods inventory, raw materials requirements, and all the other elements connected with producing your forecasts, you will want to make provision for watching costs, including selling expenses. If there are key employees who can provide input into the planning, ask them to become involved in that process
Do you test or check the reality of your goals and plans with others?
Outside advisors may spot "bugs" that you and your people did not catch in the press of working through the details of goal setting and planning.
Are operations reviewed on a regular basis with the objective of reducing costs?
Costs must be kept in line for a profitable operation. Review operations periodically such as weekly or monthly, to insure that overtime is not excessive, for example. And what about quality product acceptance by customers? Costs may be excessive because of obsolete methods or machinery that has seen its best days. And what about plant layout or materials flow? Can changes be made that will save time and materials? Determine the frequency of your reviews for the various types of operations and place a tickler on your calendar to remind you of these review dates.
Are products reviewed regularly with the objective of improving them?
Products that your customers benefit from are the key to repeat sales. A regular review of your products help to keep them up to the expectation of customers. Feedback from customers can be useful here. To reduce costs sometimes a product can be modified without sacrificing use and quality. If product obsolescence is a hazard, what plans are being made to substitute new products as existing ones become obsolete?
Do you ask outside advisors for their opinion and suggestions on products and operation procedures?
Outside persons, such as friends in non-competing lines of business and management personnel from local colleges and universities can help you see the facts about your products and operating procedures. They can provide a fresh viewpoint - the viewpoint of persons who are not so involved in the products and operations as you and your key personnel. The suggestions and counsel from a local management consultant may provide benefits far in excess of his or her cost. In this area some small companies set up a board of directors to satisfy the law concerning small corporations. But that is the end of it. Members of the board are not used for their knowledge and skill in business. They can make valuable contributions and the owner/manager should use all possible opportunities for getting such concerned opinions about the various phases of the company.
Are marketing and distribution policies and procedures reviewed periodically?
The best made product in the world can run into trouble if marketing and distribution policies and procedures are not right for it. Periodical checks can help you to be aware of changes that may be taking place in the channels through which you distribute. One approach is to check your competition; does it seem to be changing channels and policies? Can you still meet the requirements of your customers by using your traditional channels of distribution?
Are there periodic reviews of profit and loss statements and other financial reports?
In these reviews you can compare your operating ratios to those for your industry. It is also helpful to review your cash flow projections to see what, if any, changes are needed in your financial planning.
Do you have an organization chart?
You may need only a simple organization chart to show accountability and to establish a chain of command. In a family business, accountability and chain of command should be spelled out so that the one who is the chief executive of the company has the "mandate" he or she needs for managing.
Do you use job descriptions for your key personnel?
When you and your key personnel write descriptions for their jobs, you and they have a clear understanding of what is to be done and by whom. Such an understanding is essential in any small business but especially critical when relatives are involved. Spelling out duties may not prevent conflicts between you and an in-law, but such detail can help you resolve misunderstandings, if and when, they occur. In addition, when, and if, a key person leaves, the job description is a helpful tool in recruiting and training a replacement.
Do you periodically compare performance of key personnel with their job descriptions?
Periodical comparison of performance helps your key personnel to be efficient. It also helps to pinpoint weak spots for you and them to work on for improvement.
Do you provide opportunities for key personnel to grow?
Your aim should be to help key personnel stay alert to new and more efficient ways to do things. Conferences, seminars, and workshops which trade associations and agencies sponsor can help key personnel to grow in their management skills and outlook. Rotating job assignments is a way to make key personnel aware of the problems that their counterparts face. Include in your budget an amount that can be spent during the year for personnel training and education.
Do you face the issue when key personnel stop growing?
Some owner-managers try to avoid the unpleasant task of facing the fact that a key person has stopped growing. It may be the result of not matching personnel and the job. Or in some family businesses, the cousin or brother-in-law never was interested in personal growth or any aspects of management. If there is little or nothing you can do about such a mismatch, face it and don't waste time trying to do the impossible. On the other hand outside problems may be crowding in on the key person. Once you know why he or she stopped growing, you can determine what needs to be done. In some cases, additional training is the answer. In other cases, the motivation that results from broadened job responsibilities resolves the problem.
Are there policies and plans for motivating employees?
Working through others is but no means an easy task. First of all, people are not puppets that can be moved by strings. Life may be a stage, as the poet said, but most people in small business are reluctant to submit to directors. Look for ways - good communications, respect for their viewpoint, incentive pay, and so on - to encourage people to want to do what you need them to do as employees in your company.
Do you have adequate employee benefit plans?
This includes life and health insurance, major medical, and pension. Benefit plans often are necessary to meet competition for skilled employees. Substantial plans can help to hold non-family key individuals in a family-owned business.
Do you have key personnel insurance on yourself and is your family protected against your untimely passing?
If these precautions are not taken, your death could result in the rapid dissolution of the business.
Is there lack of communication among key personnel?
The routine passing of information among you and your key personnel may be all that you want it to be. But what about disagreement? Do key personnel refrain from expressing disagreement with you? Good communications should provide a forum for exchanging ideas and for airing differences of opinion. Possibly an early morning meeting once a week among you and your key personnel would provide a forum for exchanging ideas.
Does your record keeping system present a realistic picture of your business? Is this the same type of record keeping system that other companies in your industry commonly use?
Appropriate records should give the owner/manager answers to questions such as: Is there sufficient cash to operate the business? To pay back the bank? To pay taxes? Is too much capital tied up in inventory? Are accounts receivable being collected promptly? Bankers and other lenders need a realistic picture. Corporate records, if your company is a corporation, should be up-to-date including corporate minutes and record books. In checking out your record keeping, keep in mind that a poor system can result in excessive and meaningless information.
Do you seek legal and financial advice on major transactions?
The fine print in contracts causes trouble for some small business owners. They did not realize until it was too late what they had agreed to do. Legal and financial advice at the appropriate time can help the owner-manager to comprehend the full scope of your company's contractual obligations and allow you to make decisions based on facts rather than assumptions. Whenever possible use your standardized contract in making contractual obligations.
Do you document informal agreements with customers, suppliers and others?
"He's as good as his word," is a fine attitude to have about customers, suppliers, and others with whom you work on a daily basis. But think for a moment; in being as "good as your word," how often do you forget? Memory slips. A note to yourself, or to a supplier to confirm a telephone conversation, for example, helps both of you to recall what you agreed, or did not agree, upon and prevents misunderstanding and hard feeling. Keep dated copies of all correspondence you send out. At some later period these copies could be invaluable.
Do you plan your major financial decisions with the help of your accountant, Lawyer, and other tax advisors?
An owner-manager cannot ignore the impact of income taxes, as well as other taxes, on your business. You should plan major financial decisions with the help of an accountant, lawyer, and other tax advisers.
Do your plans include self development projects for yourself?
Sometimes an owner-manager sets up training for everyone in the company except him or herself. Because conditions change so rapidly you should set aside some time for activities that will help you to keep abreast of your industry and the economic world in which your company operates. Your trade association should be a source about meetings, conferences and seminars which you can use in such a program for yourself.
Are there plans for succession in the event of the untimely death of the family member who manages the company?
The successor may not be the same person who substitutes when the chief executive officer is sick or on vacation. Whether the successor is a family member or a non-family employee, the business should make the transition smoother when the family agrees upon a successor ahead of time. Such agreement is necessary if the business is to bear the expense of grooming the successor.
Other books in this category that may interest you:
A Step by Step Guide to Strategic Planning
A Step by Step Guide to New Product Development
A Step by Step Guide to Implementing MBO
A Step by Step Guide to Business Productivity Improvement
The 70 Best Business Ideas for Small Business Managers
A Step by Step Guide To Managing a Family Run Business
A Step by Step Guide to Negotiating the Buying or Selling of a Business
A Step by Step Guide
Essential Ingredients for Success
A Step by Step Guide to Managing Your Business Inventory
A Step by Step Guide to Merchandising in a Retail Store
BA Step by Step Guide to Purchasing and Supply Chain Management
A Step by Step Guide to Managing Risk In Your Business
Guide to Self Audit the Planning Activities in a Small Business
Guide to Self Audit the Production Management in a Small Business
A Step by Step Guide to Purchasing Management in a Retail Business
A Step by Step Guide to Buying and Selling a Business
A Step by Step Guide
A Step by Step Guide
A Step by Step Guide to Quality Control Management System
Perform This Self-Audit to Increase the Effectiveness of Your Business
Oportunidades de Negocio (Nuevos Negocios)
Guía para Elaborar un Buen Plan de Mercadotecnia para su Negocio
If you are interested in a half year duration see 6 month car insurance for helpful tips on the topic. How about getting more favorable premiums costs for younger drivers? see car insurance for 17 year olds and motor car insurance for under 21 and vehicle insurance for male and female under 25 years old. Here is another list of drivers insurance useful articles,
As for helpful tips regarding no deposit premium payments see car insurance with no deposit and for a list of low cost brokers, agents and companies see car insurance with no deposit companies. Read the following informative article if you are looking for better rates for the young drivers in your family, cheaper vehicle insurance for young drivers. Now, for discovering new ways to get lower quotes go to general car insurance Read this article if your after high risk car insurance information.
How about getting a better deal on first time driver? just click the link. It may come a time that you'll be interested in canceling your policy, use this article for the instruction of how to do it. Our drivers insurance hub page features a list of guides that can surely help you get dirt cheap car insurance for teens drivers rates. For those of you who seek cheap quotes for a shorter term policy, read this article. and here are tips and advice for special interest groups such as young drivers and temporary insurance.
If you have first drivers in your family look here for useful advice regarding cheap drivers first car insurance on getting very very cheap car insurance quotes, other types of policies can include the following: no deposit car insurance, pay monthly, insuring classic cars for young drivers, getting better deal on cheap liability car insurance cost, locating good rates for new drivers. how about if you are interested in pay as you go auto insurance? yep there is a guide for you. And here is a list of car insurance companies cheapest. And the list concludes with a way to calculate car insurance estimate without personal information.
Disclaimer: While every effort is made to ensure that the content of this website is accurate, the website is provided “as is” and Bizmove.com makes no representations or warranties in relation to the accuracy or completeness of the information found on it. While the content of this site is provided in good faith, we do not warrant that the information will be kept up to date, be true and not misleading, or that this site will always (or ever) be available for use. Nothing on this website should be taken to constitute professional advice or a formal recommendation and we exclude all representations and warranties relating to the content and use of this site.
Copyright © by Bizmove. All rights reserved.
Copyright © by Bizmove. All rights reserved.